2005 (4) TMI 238 - AT - Customs

Confiscation and penalty (Customs) - Misdeclaration - Show cause notice - Waiver of - Natural justice - Violation of

Issues Involved:
1. Confiscation of goods under Section 111(m) of the Customs Act, 1962.
2. Enhancement of value based on contemporaneous evidence.
3. Imposition of penalty under Section 112(a) of the Customs Act.
4. Waiver of show cause notice and personal hearing under Section 124 of the Customs Act.
5. Principles of natural justice in the context of waiver of rights.

Detailed Analysis:

1. Confiscation of Goods under Section 111(m) of the Customs Act, 1962
The appellant challenged the order by the Commissioner of Customs (Port), Calcutta, which confiscated the goods under Section 111(m) of the Customs Act, 1962. The Commissioner found that there was a gross and willful misdeclaration of value based on contemporaneous import evidence of identical goods. The goods were found to have a higher value than declared, justifying their confiscation.

2. Enhancement of Value Based on Contemporaneous Evidence
The Commissioner enhanced the value of the goods based on evidence of higher contemporaneous import value of identical goods. The ascertained CIF value was Rs. 16,46,050/-, and the extent of under-valuation was Rs. 9,79,929.50. The appellant admitted to the under-valuation and agreed to the enhancement of value based on contemporaneous import evidence.

3. Imposition of Penalty under Section 112(a) of the Customs Act
A penalty of Rs. 62,000/- was imposed on the importer under Section 112(a) of the Customs Act. The penalty was justified based on the misdeclaration of value and the appellant's admission of the same.

4. Waiver of Show Cause Notice and Personal Hearing under Section 124 of the Customs Act
The core issue revolved around the appellant's letter dated 17-7-2002, where the appellant waived the show cause notice but contended that personal hearing was not waived. The Tribunal examined whether the waiver of the show cause notice implied a waiver of personal hearing.

The appellant relied on several Tribunal decisions to argue that waiver of the show cause notice did not equate to waiver of personal hearing. However, the Department argued that the appellant had waived both the show cause notice and the opportunity for personal hearing, as indicated in the letter.

5. Principles of Natural Justice in the Context of Waiver of Rights
The Tribunal analyzed the provisions of Section 124 of the Customs Act, which mandates issuing a show cause notice before confiscation or penalty. The Tribunal concluded that the issuance of a show cause notice is mandatory unless explicitly waived by the concerned person.

The Tribunal found that the appellant's letter dated 17-7-2002 indicated an "understanding and intelligent" waiver of the show cause notice. The appellant was fully aware of the grounds for confiscation and had requested the authority to proceed without issuing a show cause notice. The Tribunal held that the waiver was valid, and the principles of natural justice were not violated.

Conclusion
The Tribunal upheld the order of the Commissioner, finding it valid and legal. The appeal was dismissed, affirming the confiscation of goods, enhancement of value, and imposition of penalty. The Tribunal clarified that the waiver of the show cause notice by the appellant was an informed and intelligent decision, and there was no breach of natural justice principles.

Final Judgment
The appeal was dismissed, and the impugned order of the Commissioner was upheld as valid and legal. The Tribunal pronounced this decision in the open court on 29-4-2005.

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