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2018 (3) TMI 291 - HC - CustomsWrit in the nature of mandamus - Penalty - Search and Seizure of various documents - Principle of natural justice - the show cause notice alleges that the petitioner's company have been habitually indulged in diversion of the imported goods, imported by them on payment of duty and Imported duty free against Advance Authorization / Licences. It was alleged that in order to fulfill export obligation, they are showing fake clearance / deemed exports under CT3 to M/s. Tara Holdings Ltd. (100% EOU), West Bengal - For effective adjudication of the controversy in hand and to determine as to whether the petitioners ought to be permitted to avail the opportunity of crossexamination, as prayed by them, it would be necessary to dwell upon the statutory scheme under which such a right is claimed. The Adjudication procedure contemplated in Chapter 14, thus mandates the adjudicating authority to follow the principles of natural justice before issuing an order of confiscation of any goods or imposition of any penalty on any person and it mandates issuance of notice in writing, informing the owner of the goods or such person of the grounds on which it has proposed to confiscate the goods or to impose the penalty and on affording an opportunity to make a representation in writing within such reasonable time, as may be specified and also offer the reasonable opportunity of being heard in the matter. Section 124 of the Customs Act, 1962 under which show cause notice has been issued to the petitioner contemplates a notice in writing informing the grounds on which it has proposed to confiscate the goods or impose a penalty and giving an opportunity of making representation in writing within a reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty - Further every departure from principles of natural justice may not result in miscarriage of justice and the Hon'ble Apex Court has at times refused to strikeout an action, not being in conformity with the principles of natural justice, unless the prejudice caused is demonstrated. In the words of the Hon'ble Apex Court, it will be “useless formality”, if the resultant situation would be the same even after due adherence to the principles of natural justice. The question as to what extent the principles of natural justice need to be stretched as they cannot be moulded and are not to be construed with stringent strictness but needs to be dealtwith the flexibility. In order to effectively defend itself the petitioner is entitled to crossexamine the said transporters as that would offer the petitioner “a reasonable opportunity” as contemplated under section 124 (c) of the Customs Act, 1962. The Petitioner company is entitled for the said opportunity since the Revenue Authority specifically relied on the statements of the transporters in support of the show cause notice, proposing confiscation of the goods and levying of penalty and foisting the liability on the petitioner company under the said Act - Petition allowed.
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