ORDER
G.A. Brahma Deva, Member
1. Appellants imported bales containing woollen rags. They have claimed clearance of the aforesaid goods under O.G.L. at entry No. 626, Appendix 6, List 8, Part I of AM. 1988-91 Policy. Condition of the Import Export Policy stipulate that import of woollen/synthetic rags is allowed in completely pre-mutilated condition. Initially 20% of the goods were examined by dock staff under the supervision of A.C. Docks and found to be completely pre-mutilated. Clearance of the goods was allowed subject to taking delivery in the presence of the Dock staff. Later on, information was received that new fabrics and serviceable garments are concealed in the bales. 100% goods were examined and according to the Department, Importer has declared the goods as woollen rags, whereas on examination these were found to be containing synthetic, cotton and blended garments in intact pieces and nylon fabric in running and bales were packed with mala fide intention in such a way that the goods other than woollen rags concealed in the bales’ could not be detected during the percentage examination of bales and markings and numbers of the bales were obliterated with mala fide intention to get delivery of the
unauthorized goods [and] prevent customs officials to detect the discrepancy. Accordingly, show cause notice was issued. The appellants requested 100% re-examination of the entire consignment in the presence of the Importer but this request was rejected by the Adjudicating Authority as 100% examination was already done in the presence of the Clearing Agent. The Additional Collector who adjudicated the proceedings ordered for absolute confiscation of the goods observing that there was no response to the show-cause notice and the Importer has deliberately and with mala fide intention mis-declared the goods and imported the goods. Accordingly, he ordered for confiscation of the entire consignment under Section 111(d), (i) and (m) of the Customs Act, 1962 in addition to imposing penalty of Rs. 4,30,000/- under Section 112 of the Customs Act.
2. Shri. Hari Om Arora, learned Advocate, appearing for the appellants, submitted that [the] order suffers from denial of principles of natural justice inasmuch as sufficient opportunity was not provided to the appellants to place their case before the Adjudicating Authority. He said that there was a reasonable request from the party asking for re-examination of the goods since there were discrepancies in the examination report inasmuch as bale numbers were not noted in the examination report. Acting on some information, these consignments were examined 100% each in the presence of the CHA when some quantity of serviceable garments and Nylon taffeta fabric were reported to have been discovered from some of the bales, whether theses objectionable articles were found in the bales examined or in the bales initially not examined is not clearly brought out. When the bales bear R. Nos. the full examination report does not reveal balewise contents. Importer was asked to appear for re-examination as per letter dated 20.10.1989 but the examination was done on 21.10.1989 without giving sufficient notice. Since re-examination was not done in the presence of the Importer, he requested to remand the matter directing the Department for re-examination of 100% goods in the presence of the party since goods are lying in the customs. He said that order passed by the Adjudicating Authority is a non-speaking order and of non-application of mind and in support of his contention he drew our attention to the particular portion of the order where numbers of the bales are not tallied under the respective bills of entry and said that there was no basis for higher valuation and simply ascertained value was indicated in the show-cause notice as well as in the order without mentioning the source and even there was no charge of under-valuation in the show-cause notice. He contended that case was never posted for personal hearing and personal hearing is a must before passing the order and on this score also [the] order suffers from denial of principles of natural justice relying upon the decisions reported in 1987 (31) ELT 947 and 1992(60) ELT 19 (SC).
3. Arguing for the Revenue Shri. A.K. Singhal, learned JDR submitted that detailed examination report of the goods was given to the Advocate who represented the party at that time and furthermore, re-examination was done in the presence of the Clearing House Agent who was duly authorised by the Importer. He contended that since there was a charge of mis-declaration in the show-cause notice, the Department was justified in enhancing the value for mis-declaration and furthermore, Section
111(m) and (d) was specifically mentioned in the show-cause notice. He said that there was neither reply to the show-cause notice nor request from the party for personal hearing.
4. We have considered the matter. Apart from other contentions raised by the appellants we find that appellants were not granted personal hearing as can be seen from the impugned order. Under Section 124(c) personal hearing is a must and mandatory. As per Section 124(c) of the Act, no order confiscating any goods or imposing any penalty on any person shall be made under this chapter unless the owner of the goods or such person is given a notice in writing is given an opportunity of making a representation in writing and is given a reasonable opportunity of being heard in the matter. Hence the matter will have to go back for re-consideration since personal hearing was not granted to the appellants before passing the order. We also find that there was no basis for enhancement of the value and ascertained value as mentioned in the order is not sufficient unless source or basis is given to the party for rebuttal. Since we are remanding the matter, request of the party for re-examination of the goods also may be considered in view of the fact that goods are lying with the Customs. With these observations, the matter is remanded to the concerned Adjudicating Authority for de novo consideration.
5. Operative portion of the order was already prenounced in the open court on 26.8.1994.