2018 (7) TMI 1596 – MADRAS HIGH COURT – 2018 (363) E.L.T. 120 (Mad.) – Principles of Natural Justice – Opportunity of personal hearing not provided – Availability of alternative remedy – Rebate Claim – Circular No.1053/2/2017- CX, dated 10.03.2017 – Held that:- In the instant case, after giving show cause notice granting 30 days time, the authority, without waiting for any reply, on the 32nd day, passed an order – The impugned order passed within two days from the date of lapse of the time granted in the show cause notice is certainly in violation of principles of natural justice and, therefore, it is liable to be set aside.
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While adjudicating the issues, it is incumbent on the adjudicating authority to provide opportunity of personal hearing, not one, at least three, with sufficient interval of time, so that,the noticeee may avail the opportunity of being heard. The very object of the Master Circular issued by the Central Board of Excise and Customs mandates that the provision
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uch circumstances, the Writ Petition is maintainable.
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The matter is remanded back to the first respondent for consideration afresh – petition allowed. – W.P.(MD)No.12060 of 2018 Dated:- 18-7-2018 – M. Govindaraj, J. For the Petitioner : Mr.A.P.Ravi For the Respondents : Mr.R.Nandakumar ORDER This Writ Petition is directed against the order of the first respondent passed in the Order in Original No.MAD-CEX-000-ASC-196-16, dated 29.07.2016, for violation of principles of natural justice. 2. The petitioner submitted a rebate application along with the required documents to the first respondent on 02.05.2016. Pursuant to the application, a show cause notice was issued by the first respondent on 24.06.2016 proposing to reject the rebate claim of ₹ 12,40,360/- and it was received by the petitioner on 27.06.2016. Since he has failed to file his objections within 30 days, the impugned order was issued on 29.07.2016 i.e., on the thirty second day. 3. The learned counsel for the pet
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elf or through an authorised representative. At least three opportunities of personal hearing should be given with sufficient interval of time so that the noticee may avail opportunity of being heard. Separate communications should be made to the noticee for each opportunity of personal hearing. In fact separate letter for each hearing/extension should be issued at sufficient interval. The Adjudicating authority may, if sufficient cause is shown, at any stage of proceeding adjourn the hearing for reasons to be recorded in writing. However, no such adjournment shall be granted more than three times to a noticee." 5. The learned counsel would also contend that the show cause notice mandated the petitioner to show cause against the notice within 30 days. As per Paragraph No.15 of the show cause notice, if no cause is shown against the action proposed to be taken within 30 days of receipt of the notice, or if they do not appear before the adjudicating authority, when the case is poste
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r or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires. (2) The Adjudicating authority may, if sufficient cause is shown, at any stage of proceeding referred to in sub-section (1), grant time, from time to time, to the parties or any of them and adjourn the hearing for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during the proceeding." 7. According to the learned Standing Counsel appearing for the respondents, a show cause notice was issued and the petitioner failed to respond to the show cause notice and has not expressed his wish to be heard in person. In the absence of any request for personal hearing, the statutory provision does not mandate the adjudicating authority to provide personal hearing. In support of his contention, the learned Standing Counsel would rely on the judgments in 2010 (253) E.L.T. 722 (Mad) [Optigrab Internationa
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309) ELT A50 (Cal)]; (9) Kantilal B.Mohite vs UOI 2014(306) ELT 51 (Bom)]; (10) Baboo Ram Hari Chand vs. UOI [2014(304) ELT 371 (Guj)]; (11) Logic Transware India Pvt Ltd vs. CC. [2014(302) ELT 228(Del)]; (12) Adhunik Power Transmission Ltd. vs. UOI [2015(325) ELT 865 (Jhar)]; (13) CC, Bangalore vs. Fly Jac Logistics Pvt Ltd [2015(323 ELT 730 (Kar)]; (14) Shrushthi Plastics Pvt Ltd vs. CCE, Puducherry [2015(323) ELT 515(Mad)]; (15) Confidence Petroleum India Ltd. vs. ADDL.C.C., C.E. & S.T., Coimbatore [2015(322) ELT 237 (Mad)]; (16) General Mills India Pvt Ltd. vs. UOI [2015(322) ELT 95(Bom)]; (17) Deputy Commissioner of Central Excise, Chennai vs. Dorcas Market Makers Pvt. Ltd., [2015(321) ELT 45(Mad.)]; (18) JSL Lifestyle Ltd. vs. Union of India [2015(326) ELT 265(P&H)]; (19) Panoli Intermediate (India) Pvt. Ltd. vs. Union of India [2015(326) ELT 532(Guj)]; (20) Data Field India Ltd., vs. Dy Commissioner of Customs (EOU), Chennai [2016(331) ELT 557 (Mad)]; and (21) Electronic
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t the assessee to appear before him for a personal hearing by himself or through his authorized representatives. At least three opportunities of personal hearing should be given with sufficient interval of time so that the noticee may avail opportunity of being heard. Separate communication should be made to the noticee for each opportunity of personal hearing. From this, it can be inferred that while adjudicating the issues, it is incumbent on the adjudicating authority to provide opportunity of personal hearing, not one, at least three, with sufficient interval of time, so that,the noticeee may avail the opportunity of being heard. The very object of the Master Circular issued by the Central Board of Excise and Customs mandates that the provision of personal hearing is very essential before deciding any issue by a quasi judicial authority. 12. Section 33-A of the Act reads that the adjudicating authority shall give an opportunity of hearing, if the party so desires. The word "sh
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t asked for it. 13. The very issuance of the show cause notice, as specified at Paragraph No.2.1 of the Master Circular, is that the object of following the principles of natural justice is no one should be condemned unheard. In this context, we see that the Circular issued by the Central Board makes personal hearing mandatory and is binding on all the quasi judicial authorities. They cannot disobey or ignore the circular, as it has the binding force on them. 14. Coming again to the provision under Chapter VI of the Central Excise Act, 1944, with regard to adjudication of confiscation and penalties, Section 33-A reads that the opportunity of being heard to a party in a proceeding, if the party so desires, shall be given. Sub-Section (2) of Section 33-A mandates that if sufficient cause is shown, at any stage of proceeding, that time shall be granted for reasons to be recorded in writing. Further, it provides for three adjournments to a party, which means that adjudicating authority sha
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llant therein and decided the issue. In such an appeal proceeding, it is observed that if personal hearing is not given, it could not be said that there was violation of principles of natural justice. More so, the subject matter of controversies/disputes between the parties only impinge upon the interpretation of various Sections of the Customs Act on legal plane and, therefore, no prejudice was caused to the party in not providing opportunity of hearing to its authorised representative. Whereas, in the instant case, a show cause notice was issued by the adjudicating authority to the petitioner and it requires explanation directly by him and in cases of clarification, requires his presence in person to explain the factual issues. The issue decided by this Court in the above said case is with regard to the appeal proceeding and that cannot be equated with the original proceedings, where the presence of the noticee is very much essential. 17. Likewise, the judgment relied on by the learn
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waiting for any reply, on the 32nd day, passed an order. Therefore, the judgment of the Karnataka High Court cannot be applied to the case on hand. 19. Again, the learned Standing Counsel for the respondents relied on the judgment of Calcutta High Court reported in 2005(185) E.L.T. 227 (Cal.) [Nellimarla Jute Mills Co. Ltd. vs. Zonal Dir.Gen. of Foreign Trade], wherein the adjudicating authority, after lapse of time granted to the petitioner therein, has extended further time of seven days and served notice on the petitioner therein and thereafter, proceeded with the adjudication. In such circumstances, it cannot be said that the order was passed hastily. Another opportunity was given in compliance with the principles of natural justice. Therefore also, the said judgment is of no avail in favour of the respondents. 20. The Hon'ble Supreme Court in Swami Devi Dayal Hospital and Dental College Vs. The Union of India and others [2013 (10) Scale 608] at Paragraph Nos.21 and 23, has obs
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l justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusion. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it before he is condemned. It is the negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the Inquiry Officer without giving the emplo
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nknown to the employee but are taken into consideration by the disciplinary authority while arriving at its conclusions. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusion, the delinquent employee should have an opportunity to reply to the Inquiry Officer's findings. The disciplinary authority is then required to consider the evidence, the report of the Inquiry Officer and the representation of the employee against it." 21. Further, in the judgment reported in General Mills India Pvt Ltd. vs. UOI [2015(322) ELT 95(Bom)]; a Division Bench of Bombay High Court at Paragraph No.4 has held as follows: "4……………. We do not see how the approach of the officer in this case can be countenanced even in the present matter. When he is aware of the requirement of giving a personal hearing before a adverse order is passed, then, the impugned order sho
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ot;Denial of Personal hearing: 10.The respondent denied the appellant opportunity of hearing only on the ground that objection was not given to the pre-assessment notices. Even if objection was not given, still the assessing authority was expected to post the matter for hearing by issuing notice to the assessee. In case the assessee fail to appear, it is open to the assessment authority to pass orders on merits. We make the position clear that the failure to submit objection to the pre-assessment notice would not give a right to the Assessment Officer to deny opportunity of personal hearing to the assessee. 23. Insofar as the issue of approaching this Court without exhausting the alternative remedy is concerned, a Full Bench of Hyderabad High Court in Electronics Corporation of India Ltd. vs. UOI [2018-TIOL-484-HC-AP-CX-LB], at Paragraph No.23, has observed as under: "23. In the result, the reference is answered holding that the decisions in M/s.Resolute Electronics Pvt. Ltd. and
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ted 29.07.2016 is concerned, it is passed without affording any opportunity of personal hearing, in contravention of the statutory provision, circular issued by the department as well as contrary to Paragraph No.15 of the show cause notice. The impugned order passed within two days from the date of lapse of the time granted in the show cause notice is certainly in violation of principles of natural justice and, therefore, it is liable to be set aside. 26. In the result, the Writ Petition is allowed and the impugned order in original dated 29.07.2016 passed by the first respondent is set aside and the matter is remanded back to the first respondent for consideration afresh. The petitioner shall file all his objections, within a period of one month from the date of receipt of a copy of this order. On receipt of objections from the petitioner, the first respondent shall afford an opportunity of personal hearing at least three times, as mandated in the Master Circular with sufficient inter
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