2022 (7) TMI 16 - AT - Customs

Levy of penalties under Section 112(a) and Section 114AA of the Customs Act, 1962 - Sufficient opportunity of hearing provided by the authorities below to the appellant or not - HELD THAT - The Adjudicating Authority did not give any personal hearing after recording that the notice issued to this appellant had returned unserved. Further, even though the First Appellate Authority has recorded, at paragraph 3 (c) of the impugned Order-in-Appeal, the specific contentions as to the non-following of the procedure contemplated under Section 153 of the Customs Act read with Section 122A ibid. by the Adjudicating Authority, but however, there is no discussion or finding recorded on this aspect anywhere by the First Appellate Authority in the impugned order. The Act prescribes the procedure to be followed before passing an adjudication order, which has to be strictly adhered to and there is no shortcut. Hence, the notice issued to the appellant in this case on hand, which was returned unserved, is as good as no notice, in the absence of following the procedure laid down under Section 153 ibid. The First Appellate Authority having recorded this specific ground urged by the appellant, has ignored the same, which is not in accordance with law. The Order-in-Original suffers from infirmity of not following the procedure laid down under the statute and hence, the same is held to be unsustainable - the matter is restored to the file of the Adjudicating Authority for passing a de novo adjudication order in accordance with law and it goes without saying that sufficient and reasonable opportunities shall be provided to the appellant, as prescribed under the statute - Appeal allowed by way of remand.

Summary

Issues:
Whether the levy of penalties under Section 112(a) and Section 114AA of the Customs Act, 1962 on the appellant is justified?

Analysis:

Issue 1: Adherence to Procedure and Natural Justice
The appellant contended that the lower authorities did not follow the procedure laid down under the statute and principles of natural justice. The Adjudicating Authority passed the Order-in-Original without providing a personal hearing after the notice was returned undelivered. The appellant requested an opportunity for fresh adjudication. The First Appellate Authority did not address this issue in its order. The Learned Advocate argued that the notice returned unserved rendered it as good as no notice, emphasizing the importance of strictly adhering to the prescribed procedure under the Customs Act.

Issue 2: Sufficiency of Opportunities
The Revenue's Assistant Commissioner argued that sufficient opportunities were given to the appellant, who chose not to participate in the adjudication and appellate proceedings. The Tribunal noted that the Adjudicating Authority failed to provide a personal hearing after the notice was returned unserved. The First Appellate Authority did not address this procedural lapse. The Tribunal emphasized that the Act mandates strict adherence to the procedure before passing an adjudication order, highlighting that the notice returned unserved was equivalent to no notice. Consequently, the Order-in-Original and the Order-in-Appeal were held unsustainable due to procedural irregularities.

Conclusion
The Tribunal set aside the impugned Order-in-Appeal and remanded the matter to the Adjudicating Authority for a fresh adjudication order in compliance with the law. The Adjudicating Authority was directed to provide sufficient and reasonable opportunities to the appellant as prescribed under the statute. The Tribunal refrained from passing any order on merits to avoid prejudicing the Adjudicating Authority's decision. The appeal was treated as allowed by way of remand, emphasizing the importance of following the prescribed procedure and principles of natural justice in adjudication proceedings.