2022 (5) TMI 815 - HC - Customs

Enhancement of penalty without given a reasonable opportunity of hearing - power of the commissioner of customs (appeals) - Violation of principles of natural justice - violation of Section 128-A of the Customs Act, 1962 - HELD THAT - The 1st respondent/the Commissioner in appeal has enhanced the penalty imposed by the original authority contrary to the provisions of Section 128-A of the Customs Act, 1962. The impugned order stands quashed and the case is remitted back to the 2nd respondent to pass appropriate orders on merits and in accordance with law afresh, within a period of 3 months from the date of receipt of a copy of this order - Petition allowed by way of remand.

Summary

Issues:
Challenge to order of confiscation and penalty under Customs Act, 1962 based on violation of principles of natural justice and Section 128-A.

Analysis:
The petitioners filed writ petitions challenging the order of the 2nd respondent for confiscation of gold jewels and imposition of penalties under Section 112(a) and 112(b) of the Customs Act, 1962. The petitioners appealed the decision before the Commissioner of Customs and Central Excise, which was rejected. The penalties imposed were enhanced on the petitioners without proper opportunity to show cause against the proposed order, as required under Section 128-A of the Customs Act, 1962. The petitioners argued that the appellate Commissioner should have followed the proviso to sub clause (3) of Section 128-A, which mandates a reasonable opportunity to be given before enhancing penalties or confiscating goods.

The learned Senior Standing Counsel for the respondents contended that the impugned order was appealable, and the petitioners were liable for penalties and confiscation due to importing gold without proper declaration. However, the Court noted that the 1st respondent, the Commissioner in appeal, had enhanced the penalties contrary to the provisions of Section 128-A of the Customs Act, 1962. The first proviso to sub Clause (3) of Section 128-A specifies that an order enhancing penalties or fines should not be passed without providing the appellant a reasonable opportunity to show cause against the proposed order.

Consequently, the Court held that the impugned order was liable to be quashed. The order was set aside, and the case was remitted back to the 2nd respondent to pass appropriate orders within three months in accordance with the law. The writ petitions were allowed, and no costs were imposed. The connected miscellaneous petitions were closed as a result of the judgment.