2021 (4) TMI 350 - AT - Customs

Validity of Service of SCN - condition precedent for giving jurisdiction to the Adjudicating Authority to pass an order - Section 153 of the Customs Act - HELD THAT - In the present case inspite of opportunity given, Revenue failed to produce the proof of delivery of the show cause notice. Further, from perusal of the order-in-original, it is found that the Adjudicating Authority have not recorded satisfaction of service of show cause notice and have proceeded to pass the ex-parte order-in-original, which is held to be a nullity in the eyes of law. Substituted service by way of affixation on the notice board of the Department is by way of last resort. In the facts of the present case, it is found that without identifying, the noticee, nor taking any reasonable measures of any substituted service as mentioned in clause (d) and (e) of Section 153(1), the Adjudicating Authority have proceeded to pass the ex-parte adjudication order. For passing a valid adjudication order, valid service of show cause notice is essential. There is no valid service of show cause notice - Appeal allowed - decided in favor of appellant.

Issues: Validity of service of show cause notice for jurisdiction to pass an order.

Analysis:
1. The appeal centered around the crucial issue of whether the show cause notice was validly served on the appellant, which is a prerequisite for conferring jurisdiction upon the Adjudicating Authority to issue an order.

2. The appellant contended that they were neither an importer nor involved in import-export activities, lacking an Import Export Code (IEC). The case revolved around parcels seized by Revenue from China, not bearing the consignor's name, addressed to a specific individual. The goods found upon examination did not match the declared description, leading to their seizure.

3. The appellant argued that neither the show cause notice nor any communication like summons or notices were served on them. Consequently, they deemed the subsequent ex-parte order-in-original as lacking jurisdiction and void. The appellant denied involvement in the imports subject to the case, emphasizing the absence of a record indicating smuggling activities.

4. The Commissioner (Appeals) rejected the appellant's initial appeal, prompting the appellant to approach the Tribunal, seeking redress.

5. During the hearing, the Tribunal observed potential deficiencies in the service of the show cause notice. As a result, the Tribunal directed the Authorized Representatives to provide a copy of the notice and proof of service, which was not adequately furnished by the Revenue's representative.

6. The Revenue's representative submitted reports indicating no regular imports by the appellant, attempting to justify the service of the show cause notice based on the address provided by the appellant in the appeal memo.

7. The appellant's counsel argued that the Revenue's actions constituted an abuse of power, highlighting the lack of proper notice service. Despite the appellant's consistent address, the Revenue allegedly failed to locate them even after a personal visit. The counsel contended that the notice's service through notice boards lacked legal validity.

8. The Tribunal referred to Section 153 of the Customs Act, emphasizing the various methods for serving summons, notices, or orders, stipulating the requirements for valid service.

9. Noting the absence of proof of delivery of the show cause notice and the Adjudicating Authority's failure to confirm service satisfaction, the Tribunal deemed the ex-parte order-in-original a legal nullity. The Tribunal stressed the necessity of valid notice service for a legally sound adjudication order.

10. Consequently, the Tribunal ruled that the show cause notice was not validly served, rendering the order-in-original devoid of legal authority. As a result, the impugned order was set aside, and the appeal was allowed with consequential benefits, adhering to legal principles.

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