1996 (1) TMI 128 - HC - Customs

Adjudication - Show Cause Notice for seized goods - Limitation - Confiscation - Absolute confiscation

Summary

Issues Involved:
1. Limitation period for serving the show cause notice.
2. Absolute confiscation of non-notified goods.
3. Violation of principles of natural justice.
4. Verification of documents and adjudication process.

Issue-wise Detailed Analysis:

1. Limitation Period for Serving the Show Cause Notice:
The petitioner contended that the show cause notice was barred by limitation as per Section 110(2) of the Customs Act. The seizure occurred on 11-2-1992, and the notice was served on 17-8-1992, exceeding the six-month limitation period which expired on 10-8-1992. The petitioner cited Supreme Court decisions, including K. Narasimhiah v. H.C. Singri Gowda, asserting that notice is not complete until it reaches the concerned person. The court noted that the limitation period must be determined by the authorities based on all relevant documents. The matter was remitted to the first respondent for reconsideration of the seizure and notice service issues.

2. Absolute Confiscation of Non-Notified Goods:
The petitioner argued that cloves are non-notified goods under the Customs Act, making absolute confiscation impermissible. This view was supported by a previous judgment in W.P. No. 10874 of 1981, dated 19-6-1987. The court agreed, setting aside the absolute confiscation order and remitting the matter back to the first respondent to consider all documents and provide the petitioner with sufficient opportunities before passing a final order.

3. Violation of Principles of Natural Justice:
The petitioner claimed that the principles of natural justice were violated as statements were obtained from suppliers behind the petitioner's back, and voluminous documents were not verified due to time constraints. The court found merit in this contention, referencing Jawhari Lal Baid v. Addl. Collector of Customs, which emphasized that conducting inquiries and verifications without giving the petitioner an opportunity to rebut constitutes a violation of natural justice. The court criticized the Deputy Collector of Customs for not verifying all documents due to time limits and for not seeking an extension. Consequently, the order dated 21-10-1992 was set aside.

4. Verification of Documents and Adjudication Process:
The court noted that the purchase bills produced by the petitioner were neither verified nor considered by the adjudicating authority. The Appellate Authority's findings were also unsatisfactory, as they failed to properly verify the documents according to the claims made by the petitioner. The court held that the adjudication process was flawed due to the failure to consider all documents and the violation of natural justice principles. The matter was remitted back to the first respondent with instructions to thoroughly review all documents and provide the petitioner with adequate opportunities before issuing a final order.

Conclusion:
The writ petition was allowed, and the orders of the Deputy Collector of Customs and the Appellate Authority were set aside. The court directed the first respondent to re-adjudicate the matter, ensuring all documents are considered and the petitioner is given sufficient opportunities to present their case. No costs were awarded, and the related W.M.P. No. 645 of 1996 was dismissed.