2022 (4) TMI 142 - AT - Customs

Principles of natural justice - change in classification - appellant submitted that requirement of Section 17(5) of the Customs Act, 1962 has not been duly complied with by the original authority inasmuch as no speaking order was passed within the stipulated time frame, on changing the classification of disputed goods from CTH 8421 to CTH 3921 - HELD THAT - The appellant has specifically stated that no show-cause notice was issued and no personal hearing was granted by the original authority in support of change in the classification of the goods. Since the requirement of sub-section (5) of Section 17 ibid has not been strictly complied with inasmuch as no opportunity of personal hearing was granted by the original authority in support of change of classification of the goods, we are of the considered view that the principles of natural justice have not been followed. Thus, the matter is required to be adjudicated afresh by the proper officer. The impugned order passed by the learned Commissioner (Appeals) is set aside and the matter is remanded to the original authority for passing of a fresh adjudication order by complying with the principles of natural justice. Needless to say that opportunity of hearing should granted to the appellant before deciding the matter afresh - Appeal allowed by way of remand.

Summary

Issues: Compliance with Section 17(5) of the Customs Act, 1962; Principles of natural justice in the change of classification of goods

Compliance with Section 17(5) of the Customs Act, 1962:
The appeal challenged the change in the classification of goods from CTH 8421 to CTH 3921, as upheld by the Commissioner of Customs (Appeals). The appellant argued that the original authority did not comply with Section 17(5) of the Customs Act, 1962, as no speaking order was passed within the stipulated time frame. The learned Advocate for the appellant contended that the original order changing the classification was not legally sustainable. On the contrary, the Revenue's representative argued that the proper order under Section 17 was passed, justifying the tariff classification change based on factual analysis and statutory provisions.

Principles of natural justice in the change of classification of goods:
Upon examination of the case records and submissions, the Tribunal found that the appellant was not provided with a show-cause notice or a personal hearing by the original authority regarding the change in classification of goods. As a result, the Tribunal concluded that the principles of natural justice were not followed, as no opportunity for personal hearing was granted before changing the classification. Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh adjudication order, emphasizing the necessity of following natural justice principles. The original authority was directed to grant the appellant an opportunity for a hearing before making a decision on the correct classification of the goods, with a timeline of three months provided for the completion of the fresh adjudication proceedings.

Conclusion:
The Tribunal allowed the appeal by remanding the matter to the original authority for a fresh adjudication order, highlighting the importance of complying with natural justice principles in classification changes. The decision emphasized the need for a fair hearing for the appellant and set a timeline for the completion of the proceedings.