2020 (12) TMI 919 - AT - Customs

Levy of penalty under Section 112 of the Customs Act, 1962 - proceeding of adjudication without supplying the relied upon documents - Alleged recovery and seizure was initially made by the BSF and subsequently was handed over to the Customs authority - burden of proof in terms of Section 123 of the Customs Act, 1962 - HELD THAT - The learned Commissioner (Appeals) should have verified the facts prior to dismissal of the appeal of the appellant. It is not in dispute that the Show Cause Notice dated 14.8.2018 was issued without appending any relied upon documents though it had placed reliance upon several documents such as BSF seizure, Customs inventory, statements of different persons, Assay report etc. The imposition of penalty upon the present appellant by the Adjudicating authority is based upon such documents - It is a settled position of law that a Show Cause issuing authority is required to provide copies of all relied upon documents along with the Show Cause Notice. When the authority wants to rely upon such documents, it is incumbent upon them to provide copy of such documents to the noticee and non-supply of such copies of relied upon documents to the noticee renders the process of adjudication void ab-initio. In the present case also, order passed by the Lower adjudicating authority without supplying such relied upon documents along with the Show Cause Notice and finalizing adjudication of the matter w.r.t. the present appellant was bad in law. However, the Adjudication Order has already merged in two separate Orders-in-Appeal with respect to different noticee as recorded hereinbefore. Pertinent to observe that there is no appeal against Order-in-Appeal No. KOL /CUS (CCP) /AA /293 /2019 dated 01.05.2019 w.r.t. noticee no. 2 of the Show Cause Notice dated 14.08.2018. Since such Order-in-Appeal setting aside penalty upon the said noticee has reached its finality, no fresh proceeding against such noticee can be drawn at this stage. The matter remanded to the original Adjudicating Authority i.e. the Assistant Commissioner of Customs, Maldah Customs Division, Maldah for adjudication of the case afresh w.r.t. the present appellant being noticee no. 1 in the Show Cause Notice dated 14.8.2018 after providing authenticated copies of all relied upon documents to the present appellant - appeal allowed by way of remand.

Summary

Issues:
1. Burden of proof under Section 123 of the Customs Act, 1962.
2. Imposition of penalty under Section 112 of the Customs Act, 1962.
3. Non-supply of relied upon documents during adjudication.

Analysis:

Issue 1: Burden of proof under Section 123 of the Customs Act, 1962
The appellant contended that since the seizure was initially made by the BSF and then handed over to Customs, the burden of proof under Section 123 of the Customs Act should not apply. However, the Appellate Commissioner upheld the penalty, citing the appellant's acceptance of misconduct without justifying legal procurement of the seized goods. The Tribunal relied on a judgment in a similar case to support the decision.

Issue 2: Imposition of penalty under Section 112 of the Customs Act, 1962
The appellant argued that the penalty imposed under Section 112 was unlawful as the conditions were not satisfied. The Appellate Commissioner upheld the penalty based on the appellant's involvement in the smuggled activity, as evidenced by his statement. The Tribunal found the penalty imposition justified based on the evidence presented.

Issue 3: Non-supply of relied upon documents during adjudication
The appellant raised concerns about the non-supply of relied upon documents along with the Show Cause Notice, rendering the adjudication process void ab-initio. Citing a case precedent, the Tribunal emphasized the necessity of providing all relied upon documents to the noticee. The failure to do so was deemed a violation of natural justice, leading to the decision to remand the case for fresh adjudication after providing authenticated copies of all relied upon documents to the appellant.

In conclusion, the Tribunal allowed the appeal by remanding the matter to the original Adjudicating Authority for fresh adjudication, emphasizing the importance of maintaining principles of natural justice and providing the appellant with a fair opportunity to defend himself. The decision highlighted the need for due process and adherence to legal procedures in customs adjudication cases.