Mandatory Personal hearing u/s 28(8) of Customs Act cannot be denied by relying on special provision S.122A: Kerala HC
The court disposed of the writ petition is disposed by quashing order and consequential notices, with a direction to the 2nd respondent to re-consider the matter, after giving the petitioner an opportunity for being heard.
The Kerala High Court has held that a mandatory hearing opportunity is to be granted under section 28(8) of the Customs Act, 1962 and it cannot be denied by the department by relying on a special provision under section 122A of the act. Premier Marine Foods, the petitioner is a partnership firm engaged in import and export, has approached the Court being aggrieved by Order...
The Kerala High Court has held that a mandatory hearing opportunity is to be granted under section 28(8) of the Customs Act, 1962 and it cannot be denied by the department by relying on a special provision under section 122A of the act.
Premier Marine Foods, the petitioner is a partnership firm engaged in import and export, has approached the Court being aggrieved by Order in Original issued under Section 28 of the Customs Act, 1962. The petitioner had made exports against 397 shipping bills during the period from 01.01.2020 till 30.06.2022. Out of the said shipping bills, there were short realization in respect of 22 bills to an extent more than 12.5% of the FOB value and therefore, notice was issued by the 2nd respondent under Rule 18 of the Customs and Central Excise Duty Drawback Rules, 2017, proposing to recover the availed duty drawback in proportion to the sale proceeds not realized/short realized.
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As per the notice, the petitioner was granted 30 days time to submit their objection to the proposal. The same was finalized as per Order in Original, for the reason that the petitioner failed to respond the same. A demand of Rs.1,32,08,280/- was confirmed against the petitioner. Against the order, the petitioner submitted rectification application under Section 154 of the Customs Act. Without considering the rectification application, demand letter was issued.
A statement and an additional statement were submitted by the respondents 2 to 4. In the additional statement, they have specifically stated that, in the notice issued to the petitioner, they were informed to submit a written request for personal hearing, if they so desire. However, the petitioner failed to respond to the notice or request for a personal hearing.
The main contention raised by the counsel for the petitioner is that the order is not legally sustainable as the statutory requirement of personal hearing was not provided to the petitioner as contemplated under Section 28(8) of the Customs Act, 1962. On the other hand, the standing counsel for the respondents pointed out that, as per Section 122A of the Customs Act, the adjudicating authority may grant an opportunity of being heard to a party in a proceedings, if the party so desires. In this case, even though such an opportunity was extended to the petitioner, the petitioner did not intimate the 2nd respondent with regard to the requirement of a personal hearing.
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The court observed that Section 28 of the act specifically deals with adjudication of the demands relating to the duties not levied or short paid. Sub Section 8 of Section 28 specifically contemplates that the proper officer shall, after allowing the concerned person an opportunity of being heard and after considering the representation, if any, made by such person, determine the amount of duty or interest due from such person not being in excess of the amount specified in the notice. Thus, it is evident that, as far as personal hearing is concerned, it is made mandatory as per the aforesaid provision.
“Since this is a special provision deals with the issue on hand, the reliance placed by the learned Standing Counsel upon Section 122A, which is a general provision, cannot be made applicable to the facts of this case.”the bench viewed.
On going through the notice, the single bench of Justice Ziyad Rahman A.A. found that apart from requiring the petitioner to submit evidence of realization of the export proceeds within 30 days and also intimating that if the exporter desires to be heard, they may request for the same in writing, no specific date was fixed for personal hearing. Thus, the 2nd respondent had only extended an option to the petitioner to avail an opportunity for personal hearing, if they desire. A
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In the light of the statutory stipulation contained in Section 28(8), it is not sufficient and it was obligatory on the part of the 2nd respondent to intimate the petitioner about specific date on which the petitioner was supposed to appear for personal hearing. Since such course has not been adopted in the case,the assessment order cannot be treated as the one that is in tune with the statutory requirements.
The court disposed of the writ petition is disposed by quashing order and consequential notices, with a direction to the 2nd respondent to re-consider the matter, after giving the petitioner an opportunity for being heard.
Sri.Jose Jacob appeared for the petitioner and Sri.P.R.Sreejith appeared for the official respondents.
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