2024 (11) TMI 1433 - AT - Customs

Violation of principles of natural justice - SCN not recived in time - classification of imported goods - Tin Ingots - classifiable under Customs Tariff Heading (CTH) 80011090 or not - recovery of duty with interest and penalty - HELD THAT - The appellant is right in his submission that the adjudication order has been passed in gross violation of principles of natural justice and only one date of hearing i.e. 25.06.2020 was given to the appellant. No show cause notice was served on the appellant and the same was given to them at the time of hearing is evident from the record of hearing. After service of the show cause notice no opportunity for any personal hearing was given to the appellant and the matter has been adjudicated immediately after the expiry of the date given for making written submissions. It is settled principle in law that justice should not only be done in quasi judicial proceedings but should be apparent from the manner of conduct of proceedings. The submission of the appellant is agreed that the order has been passed in gross violation of principles of natural justice. There are no merits in the appeal filed by the revenue to the extent that interest amount should have been added to the duty short paid while imposition of penalty under Section 114A of the Act. Tribunal and even High Court has repeatedly emphasized that the word used in the section or and not and . In case of Sony sales Corporation 2021 (3) TMI 174 - KARNATAKA HIGH COURT Hon ble Karnataka high Court has held that From perusal of the relevant extract of Section 114A it is evident that the language employed by the Legislature is plain and unambiguous and the provision contains a positive condition with regard to levy of penalty equal to duty or interest and does not contain any negative condition. The expression used is or which is disjunctive between duty or interest and further use of expression as the case may be clearly suggest that aforesaid provision refers to two different persons and two different situations viz. one in which a person will be liable to duty and in other he may be liable to pay interest only and provides that in both the situations the person liable to duty would be liable to penalty equal to duty and person liable to interest would be liable to penalty equal to interest. Conclusion - i) There are errors in the computation of demand specifically noting a repetition of a Bill of Entry number in the calculations. ii) The interest amount should not have been added to the duty short paid while imposing the penalty under Section 114A of the Act. The matter is remanded back to the Original Authority for fresh decision on merits and after following the principles of natural justice within a period of three months from receipt of this order - appeal allowed by way of remand.

Summary

The judgment by the Appellate Tribunal CESTAT ALLAHABAD addressed two key issues:1. **Violation of Principles of Natural Justice:** - The appellant argued that the order was passed in violation of natural justice principles as they did not receive the show cause notice in time. - The appellant contended that they were not given adequate time to respond and that there were calculation errors in the demand. - The Tribunal agreed with the appellant, noting that the order was indeed passed in violation of natural justice principles. - The Tribunal highlighted that the appellant was only given one date for a hearing, and no show cause notice was served on them prior to this date. - It was emphasized that justice should not only be done but should also be seen to be done in quasi-judicial proceedings.2. **Interpretation of Customs Act and Imposition of Penalty:** - The core issues revolved around whether the benefit of a specific notification was rightly availed by the importer and whether penalty under Section 114A of the Customs Act, 1962 was imposable. - The Tribunal found errors in the computation of demand, specifically noting a repetition of a Bill of Entry number in the calculations. - The Tribunal dismissed the appeal filed by the revenue, stating that the interest amount should not have been added to the duty short paid while imposing the penalty under Section 114A of the Act. - Reference was made to a Karnataka High Court case to emphasize the interpretation of the word "or" in the relevant statutory provision, clarifying that it should not be read as "and." In conclusion, the Tribunal allowed the appeal filed by the appellant and remanded the matter back to the Original Authority for a fresh decision, emphasizing the need to follow principles of natural justice. The appeal filed by the revenue was dismissed.