1990 (3) TMI 184 - AT - Customs

Summary

Issues:
- Show cause notice validity
- Proof of service of show cause notice
- Allegations of assumptions and presumptions
- Application of Customs Act and Import Control Act
- Involvement of appellants in alleged offenses
- Liability to penalty

Analysis:

The judgment by the Appellate Tribunal CEGAT, New Delhi dealt with two cases arising from the same order in original regarding the detention, examination, and seizure of a consignment of cigarette lighters transhipped through Delhi. The show cause notice issued in May 1986 under Sections 111(d) and 112 of the Customs Act raised concerns about the validity of the notice, specifically regarding the lack of clarity on the date of issue. The appellants argued that the notice was not served within six months of the seizure, thus rendering the goods liable for release.

The Tribunal considered the proof of service of the show cause notice as a crucial point, emphasizing the requirement for timely service as per Section 110(2) of the Customs Act. The department failed to demonstrate that the notice was served within the stipulated time frame, leading to the conclusion that the order of confiscation was liable to be set aside solely on this ground. Additionally, the Tribunal noted that the department's action was primarily based on assumptions and presumptions, lacking substantial evidence against the appellants.

Regarding the application of the Import Control Act and Customs Act, the appellants contended that the case involved transhipment, exempting it from the provisions of the Import Control Act and Section 111(d) of the Customs Act. The Tribunal concurred with this argument, highlighting the absence of any conclusive proof implicating the appellants in committing offenses or incurring penalties.

Ultimately, the Tribunal accepted the appeals, directing the immediate release of the goods and the refund of any paid penalties. The judgment underscored the importance of procedural compliance, evidentiary support, and the necessity for clear legal grounds to establish liability in customs-related cases.