1990 (3) TMI 191 - AT - Customs

Summary

Issues Involved:

1. Confiscation and penalty imposed on the appellants.
2. Procedural irregularities and non-compliance with principles of natural justice.
3. Validity of the adjudication process and orders passed by the Addl. Collector.
4. Mis-declaration and mis-valuation of imported goods.
5. Validity of the show cause notice and subsequent actions by the Customs authorities.

Issue-wise Detailed Analysis:

1. Confiscation and Penalty Imposed on the Appellants:

The judgment addresses appeals against the order of the Addl. Collector of Customs, Delhi, dated 15.9.1988, which confiscated two consignments of DMF disks and imposed penalties on the appellants. The Addl. Collector's order was based on the findings that the goods were imported in violation of the Customs Law, and the appellants were involved in a conspiracy to clear the consignments through Customs. However, the Tribunal found that the Addl. Collector had improperly adjudicated the matter by including goods from a previously adjudicated consignment and imposing a composite penalty based on the total quantity and value of both consignments.

2. Procedural Irregularities and Non-Compliance with Principles of Natural Justice:

The Tribunal observed significant procedural irregularities, including the failure to grant a proper and effective opportunity for personal hearings to the appellants. The Addl. Collector passed an ex-parte order without considering requests for adjournments or addressing the submissions made by the appellants. The Tribunal emphasized that the principles of natural justice were not observed, and the order was a non-speaking order, failing to discuss major issues or record findings on the appellants' submissions.

3. Validity of the Adjudication Process and Orders Passed by the Addl. Collector:

The Tribunal found that the Addl. Collector and the Asst. Collector had ignored and bypassed the statutory order of the Executive Collector passed under Section 129D(2) and (4). The Addl. Collector's order included goods already adjudicated upon by the Asst. Collector, which was improper and rendered the second order null and void concerning the first consignment. The Tribunal noted that there cannot be two adjudication orders for the same goods, and the composite penalty imposed was not sustainable.

4. Mis-declaration and Mis-valuation of Imported Goods:

The Tribunal highlighted discrepancies in the department's handling of allegations of mis-declaration and mis-valuation of the imported goods. The Executive Collector had noted gross mis-declaration of quantity and value, but these serious charges were omitted in the show cause notice issued by the Addl. Collector. The Tribunal found that different sets of allegations were made for the same consignment, affecting the credibility of the department's version.

5. Validity of the Show Cause Notice and Subsequent Actions by the Customs Authorities:

The Tribunal scrutinized the show cause notice and the actions taken by the Customs authorities. It was noted that the show cause notice combined issues related to both consignments and invoked incorrect sections of the Customs Act without making a proper case for concealment or specifying sub-sections. The Tribunal also questioned the lack of enquiry with banks and foreign suppliers to ascertain who placed the orders and how the documents were retired. The Addl. Collector's failure to address the appellants' replies and statements further undermined the validity of the adjudication process.

Conclusion:

The Tribunal concluded that the impugned order was passed without proper application of mind, ignoring relevant facts, and violating principles of natural justice. The procedural lapses and non-speaking nature of the order rendered it bad in law. Consequently, the Tribunal set aside the penalties imposed on all the appellants, emphasizing the need for adherence to legal norms and procedural fairness in adjudication proceedings.