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2021 (4) TMI 1130 - HC - CustomsQuantum of penalty u/s 112(b) of the Customs Act - Smuggling - Gold Jewellery - Foreign Currency - Motor Vehicle - requirement of separate show cause notice before enhancement of penalty from ₹ 1 lakhs to ₹ 10 lakhs at the revisional stage - HELD THAT - On completing inquiry, a show cause notice had been issued by the DRI being DRI/ AZU ND14/19 on 28.01.2014 proposing confiscation of gold and foreign currency of USD 10,000/- and motor vehicle and also for the imposition of penalty. This was adjudicated by the adjudicating authority in order in original by an elaborate discussion of entire materials. When the appeal was preferred against the order in original, the Commissioner of Customs (Appeals) under section 128A had reduced the penalty from ₹ 10 lakhs to ₹ 1 lakhs, against which the revision application under section 129DD of the Customs Act was preferred where the DRI approached for revision of the said order in appeal - Sub-section (5) of section 129DD precludes passing of order of enhancing any penalty or fine in lieu of confiscation or confiscation of goods of greater value, unless while passing order under section 128A, the appellate authority has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value. However, if the Appellate authority has not enhanced as provided under sub-section 5(a), issuance of notice to the person affected by the proposed order, is insisted within one year from the date of the order sought to be annulled or modified. The order sought to be modified was of the Appellate Authority being Commissioner of Customs (Appeals) dated 20.01.2016 as the application for revision was preferred by the respondent No.2 under section 129DD of the Act, before the Principal Commissioner Ex Officio Additional Secretary to Government of India on 30.11.2018. The petitioner was served with the notices thrice on 04.09.2018, 01.10.2018 and on 30.10.2018/ 06.11.2018. Grievance sought is made by the petitioner of nonservice of show cause notice, although he had admitted of receipt of one notice of hearing on dated 23.10.2018 which is within the prescribed period under sub-section 5(b) of section 129DD of the Customs Act. There may not be any formal show cause notice, this notice of the revisional authority would be sufficient compliance under the law - Even otherwise, this revision being a continuance of original order, there could not have been a need for a separate issuance of the show cause notice in a literal sense at the time of the matter having travelled to the revisional authority. The challenge made by the petitioner and the issues raised of non-issuance of the show cause notice merit no assistance, inasmuch as, aggrieved by the order in appeal of the appellate authority that the department had chosen to question it before the revisional authority. It was in continuity that this litigation had eventually culminated into revival of the order of penalty of ₹ 10 lakhs. Role of the petitioner in the act of smuggling the gold and currency notes is quite apparent and established from plethora of materials, which have been duly and satisfactorily proved on the strength of the documentary as well as oral evidence as required by the law. The entire conspiracy hinges around his relationship with Jagdishbhai at Sharjah and from the admissible and conclusive evidence recorded by the respondent, the petitioner has been rightly and unfailingly been held liable for committing the act in total contravention of law and hence, imposing of the penalty is found justifiable - Petition dismissed - decided against petitioner.
Issues Involved:
1. Legality of the enhancement of penalty without a separate show cause notice. 2. Compliance with principles of natural justice. 3. Validity of evidence and the role of the petitioner in the smuggling act. Detailed Analysis: Issue 1: Legality of the Enhancement of Penalty Without a Separate Show Cause Notice The petitioner challenged the enhancement of the penalty from ?1 lakh to ?10 lakhs by the revisional authority without a separate show cause notice. The petitioner argued that under subsection 5(b) of section 129DD of the Customs Act, the enhancement of penalty is impermissible without a notice within one year from the date of the original order. The Court examined section 129DD and concluded that the notice of hearing served on 23.10.2018, within the prescribed period, sufficed as compliance under the law. The Court held that a formal show cause notice was not necessary as the revision was a continuation of the original proceedings, and the petitioner was adequately notified. Issue 2: Compliance with Principles of Natural Justice The petitioner contended that the principles of natural justice were violated as he was not given sufficient opportunity to be heard. He claimed that he was only served with one hearing notice and was not informed about subsequent hearings. The respondents countered that the petitioner was given multiple opportunities to attend hearings on 04.09.2018, 01.10.2018, and 30.10.2018/06.11.2018, which he failed to attend. The Court found that the petitioner was indeed served with notices and had admitted to receiving at least one notice. Thus, the Court determined that there was no lapse in the principles of natural justice by the respondent authority. Issue 3: Validity of Evidence and the Role of the Petitioner in the Smuggling Act The petitioner argued that he was not involved in the smuggling of gold and foreign currency and that the evidence, including Call Data Records (CDRs), did not support the imposition of the penalty. The Court reviewed the detailed findings from the investigation, including the statements recorded under section 108 of the Customs Act. The evidence showed that the petitioner, an Airport Supervisor, had facilitated the smuggling by instructing ground staff to receive and handle the smuggled goods. The Court found that the petitioner’s involvement was well-documented and corroborated by multiple sources, including the passenger’s statement and the recovery of smuggled items from the ground staff’s residence. The Court also noted that the petitioner had admitted to his role in the conspiracy during his statement under section 108 of the Customs Act. The Court emphasized that the petitioner’s actions constituted a misuse of his position and access at the airport to facilitate smuggling. Given the comprehensive evidence and the petitioner’s key role in the smuggling operation, the Court upheld the imposition of the penalty. Conclusion: The Court dismissed the petition, finding no merit in the arguments presented by the petitioner. The enhancement of the penalty was deemed lawful, the principles of natural justice were upheld, and the petitioner’s involvement in the smuggling act was conclusively established. The penalty of ?10 lakhs was reinstated, and the petition was dismissed as meritless.
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