1993 (12) TMI 67 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the adjudication order.
2. Compliance with principles of natural justice.
3. Proper service of show cause notice.
4. Reasonable opportunity for representation.

Detailed Analysis:

1. Legality of the Adjudication Order:
The appellant challenged the adjudication order on the grounds that it was illegal, arbitrary, and opposed to the principles of natural justice. The adjudicating officer had imposed a penalty of Rs. 5,00,000/- for violations of Sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 (FERA). The appellant argued that the adjudicating officer did not follow the mandatory provisions of the Act and the rules framed thereunder, thus vitiating the order.

2. Compliance with Principles of Natural Justice:
The appellant contended that the adjudication order was passed without giving him an opportunity to be heard, which is a violation of the principles of natural justice. The appellant argued that the show cause notice was not properly served as per the statutory provisions, thereby denying him a reasonable opportunity to present his case.

3. Proper Service of Show Cause Notice:
The appellant argued that the show cause notice was not properly served under Rule 10(c) of the Adjudicating Proceedings and Appeal, Rules 1974. The notice was affixed at the appellant's address in Royapettah, Madras, which he had left three years prior. The appellant maintained that his permanent address was in Keelakarai, Ramanathapuram District, and the notice should have been served there. The court found that the adjudicating officer did not make attempts to serve the notice under Rules 10(a) and 10(b) before resorting to Rule 10(c), thus invalidating the service of the notice.

4. Reasonable Opportunity for Representation:
The court noted that under Section 51 of the FERA, the adjudicating officer is required to hold an enquiry in the prescribed manner after giving a reasonable opportunity for making a representation. The court found that the appellant was not given this opportunity as the show cause notice was not properly served. The adjudicating officer's failure to serve the notice at the appellant's last known residence in Keelakarai deprived the appellant of the chance to defend himself.

Conclusion:
The court concluded that the adjudication order dated 10-4-1990 and the subsequent appellate order confirming it were unsustainable. The appellant was not given a fair opportunity to present his case due to improper service of the show cause notice. Consequently, the penalty of Rs. 5,00,000/- and the confiscation order were set aside. The appellant was entitled to a refund of the penalty amount and the confiscated sum of Rs. 22,850/-. The appeal was allowed with no order as to costs.