Customs, Excise and Gold Tribunal - Mumbai
Pundalik R. More vs Collector Of Customs on 12 December, 1988
Equivalent citations: 1989(41)ELT436(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. All these stay applications and appeals arise out of and are directed against the Order-in-Original bearing No. S/14-5-229/87 (DRI/BZU/101/Appg/49/87) dated 27-7-1988 passed by the Collector of Customs (Preventive) Bombay.
2. The captioned appeals were not listed for hearing today. Stay applications were, however, listed for hearing. We heard Shri Jeshtmal on the stay applications. We also heard Shri Mondal. On hearing both sides we have decided to take up the appeals themselves and accordingly the appeals were taken up for hearing.
3. Since these appeals involve common questions, they are clubbed together and hence this common order.
4. By the impugned order, the learned Collector, among other things, had passed the following order :-
"I impose a penalty of Rs. 2 lakhs on S/Shri Pandurang Tukaram Deokar and Pundlik Raghunath More under Section 112(b) of the Customs Act, 1962.
I also impose a penalty of Rs. 2 lakhs on S/Shri Pandurang Tukaram Deokar and Pundlik Raghunath More under Section 74 of the Gold (Control) Act, 1968.
I impose a penalty of Rs. 25,000/- (Rupees Twenty-five thousand only) on Shri Ravindra Eknath Deokar under Section 112(b) of the Customs Act, 1962.
I impose a penalty of Rs. 25,000/- (Rupees Twenty-five thousand only) on Shri Ravindra Eknath Deokar under Section 74 of the Gold (Control) Act, 1968."
5. In the appeals, penalties imposed on the appellants had been challenged.
6. Shri Jeshtmal, appearing for the applicants/appellants, submitted that the show cause notices were not served on any of the appellants. The appellants were also not given opportunity of personal hearing. The Collector's order is ex parte. He further submitted that from the Collector's order it is not possible to state whether the penalty on S/Shri Pandurang T. Deokar and Pundlik R. More is joint or several.
7. The further submission of Shri Jeshtmal was that the show cause notices were dated 30-3-1988. From the order of the Collector it is clear that they were not served on the appellants but they were returned to the Collector with the postal endorsement "not known". The detention order of the COFEPOSA was made against all the three appellants on 7-3-1988. They were actually detained on 7-5-1988. The detention order was quashed on 12-7-1988. On 18-7-1988 the appellants were released.
8. It was the submission of Shri Jeshtmal that the hearing notices dated 16-6-1988 fixing the date of hearing as 21-7-1988 were issued by the Collector to the same old addresses to which show cause notices were issued. These were also received back as "undelivered" by the postal authorities on 27-7-1988. The appellants were reported to have approached the DRI and sought for copies of the show cause notices. They were stated to have been furnished with the copies of show cause notices. Since the copies of the documents on which the department relied on were not supplied alongwith the copies of the show cause notices, the appellants on 1-8-1988 made a request to the Collector for furnishing the copies of the documents. They received a communication dated 16-9-1988 from the Collector intimating that he had already passed the order. Shri Jeshtmal submitted that on the face, the order of the Collector is bad in law and requires to be set aside. Hence the appellants cannot be called upon to make any deposit, in pursuance of such an illegal order.
9. Shri Mondal, appearing for the Collector, did not dispute any of the facts. He, however, submitted that the Collector would have published in the Customs House Notice Board, the copies of show cause notices. Shri Mondal further submitted that even though the hearing notices are dated 16-6-1988, the actual date of hearing was on 21-7-1988, by that time the appellants were free from detention. He, therefore, submitted that the appellants had enough opportunity to go before the Collector and contest the matter.
10. We have carefully considered the submissions made on both sides. Section 124 of the Customs Act is mandatory. No penalty or confiscation can be ordered unless the person against whom the penalty proposed to be imposed is given an opportunity of making representation against the proposed penalty. He has to be informed of the ground on which the penalty is proposed to be imposed. He should be given resonable opportunity and not just an opportunity. It is not an empty formality which is contemplated. It should be real and substantial. The Collector's order does not indicate compliance of the legal requirement of publishing the copies in the Customs. House Notice Board (see Section 153 of the Customs Act). It is surprising that even after the notices sent to the appellants were returned with the postal endorsement "not known", the Collector again sent the hearing notice to the same address. The Collector could not have been unaware of the fact that the date on which the hearing notice was issued on 16-6-1988, all the appellants were under detention under COFEPOSA. One would have expected the Collector to send the notices of hearing to the Supdt. of Jail, in which the appellants were lodged. There is considerable force in the contention of Shri Jeshtmal that the Collector's order is bad in law for not complying with the mandatory requirements of law. This is a clear case of violation of rules of natural justice also. On this ground alone the Collector's order, in so far as it relates to the present appellants are concerned, is liable to be set aside. It is strange that the Collector imposed a penalty on two persons jointly. The party should be told, what is the amount to be paid by him as penalty. In law it is not open to the Collector to impose a penalty jointly on two persons. There is a grave irregularity.
11. On consideration of all the aspects, we set aside the Collector's order in so far it relates to the present appellants. The penalties on the appellants under both the Acts are set aside. We, however, remand the matter to the Collector for fresh adjudication. Since the copies of show cause notices have been already furnished to the appellants, the Collector shall now furnish copies of all the documents relied upon, to the appellants and grant them reasonable time for reply. He shall then afford personal hearing and pass orders in accordance with law.
12. Since we have disposed of the appeals, the stay applications do not survive for consideration and they are disposed of accordingly.