Judgment:
1. The appellant challenges the order made by Commissioner of Customs (Port), Calcutta on 7.10.2002 confiscating the goods in question under Section 111(m) of the Customs Act, 1962 and enhancing their value on the basis of contemporaneous evidence discussed in the order, for the purpose of assessment and also imposing penalty of Rs. 62,000/-on the importer under Section 112(a) of the said Act.
2. The entire debate of both the sides had centered around the letter dated 17.7.2002 addressed by the appellant to the concerned authority.
According to the Revenue, by this letter, since the show cause notice contemplated by Section 124 of the said Act was waived and the appellant had agreed to accept the loading on the transaction value for the consignment in question, it was not open to the appellant to challenge in the impugned order. It is contended on behalf of the appellant, on the other hand, that there was only waiver of show cause notice and personal hearing was no waived.
3. The appellant was engaged in the trade of electronic goods and had imported parts and components of VCD players vide Bill of Entry dated 26.6.2002. According to the department, it contained mis-declaration of value. On investigation, gross and wilful misdeclaration of value was found on the basis of the evidence of higher contemporaneous import value of identical goods, as per the case of the respondent. The ascertained CIF Value, on the basis of contemporaneous import evidence of identical goods, appeared to be Rs. 16,46,050/-and the extent of under-valuation on the basis of the available evidence appeared to be Rs. 9,79,929.50 paise. The appellant is said to have admitted under-valuation and requested for waiver of show cause notice and personal hearing by the said letter dated 17.7.2002, according to the respondent.
4. In paragraph 6 of the order of the Commissioner it was noted that the imported had, inter-alia, admitted the charge of mis-declaration of value and had agreed for enhancement of the same on the basis of contemporaneous import evidence of similar goods. The Commissioner found that identical unbranded goods of Chinese original imported during the same period through Calcutta Port/Airport had much higher value. The Commissioner noted that the price of various items imported in the subject consignments were required to be enhanced on the basis of evidence of higher value available in the form of contemporaneous value evidence which he marshalled in the order in a tabular form in paragraph 7.
5. The learned counsel appearing for the appellant argued that by the letter dated 17.7.2002 the appellant had only waived issuance of a written show cause notice and had not waived personal hearing in the matter. He submitted that waiver of show cause notice did not amount to waiver of personal hearing and that waiver was only of informing the grounds in writing. Therefore, the grounds should have been communicated to the appellant orally.
5.1 The learned Counsel in support of his contentions placed reliance on the following decisions: a) The decision of this Tribunal in KEMTRODE PVT. LTD. v. Commissioner of Customs, Bangaloe reported in 1999 (105) ELT 595 was cited to point out that in paragraph 9 (ii) of the order, the Tribunal held that though the show cause notice as well as the personal hearing were waived by importers, the law with regard to the principles of natural justice clearly lays down that even in such a case, personal hearing should have been granted;Sachdeva & Sons v. Collector of Customs reported in 1987 (29) ELT 917 was cited to point out that it was held therein, in the context of Section 124 of the said Act that, it did not provide for waiver of the show cause notice, but it provided that at the request of the affected person, the show cause notice and representation may be oral. It was held that in the orders passed by the Additional Collector, there was no communication that the appellants therein were informed of the charges levelled against them or that they were informed of the documents on which the Department placed reliance and thus there was legal infirmity in the order made by the Additional Collector.
(c) The decision of this Tribunal in SMM Steel Re-Rolling Mills (P) Ltd. v. Commissioner of Customs, Tuticorin reported in 2001 (130) ELT 897 was cited to point out that in paragraph 8 thereof it was held that even though the appellants therein had waived the show cause notice, the orders impugned had relied on a technical opinion and also an import made one year earlier for assessing the nature of the imported goods without giving effective opportunity to the appellants therein to submit their representative in the matter and, therefore, the orders impugned therein were against the principles of natural justice.P.K. Goel New Delhi v. Collector of Customs, Delhi reported in 1983 ELT 648 was cited to point out that the order of the Assistant Collector was held to have been passed in breach of principles of natural justice and in violation of Section 124 on the ground that unless a person waives his right of personal hearing he has to be heard. It is quite clear from this decision that it does not lay down that despite a waiver a person can insist on hearing and on the contrary it contemplates the waiver of the right of personal hearing.
6. The learned authorized representative appearing for the Department argued that the importer had waived the issuance of the show cause notice under Section 124 as well as the opportunity of personal hearing and he cannot, therefore, turn around and say that he should be personally heard. The learned authorized representative of the Department argued that from the letter dated 17.7.2002 of the appellant, it would appear that he was fully aware of the relevant aspects of the matter and the grounds on which the show cause notice would have been given to him and what for he has waived the same. It was submitted that Section 124 did not contain the grounds on which notice was to be given and it referred to the grounds contained in the other provisions of Chapter XIV.6.1 The learned authorized representative of the Department placed reliance on the following decisions in support of his contention:-Commissioner of Customs v. Virgo Steels reported in 2002 (141) ELT 598 SC rendered in the context of the provisions of Section 28 of the said Act was cited for the proposition that even though a provision of law is mandatory in its operation, if such provision is one which deals with the individual rights of a person concerned and is for his benefit, such person can always waive such right, and that the right of notice under Section 28 of the Act being personal to the person concerned, the same can be waived by that person.CENLUB INDUSTRIES LTD. v. COMMISSIONER OF CUSTOMS, New Delhi reported in 2001 (132) ELT 206 was referred in order to point out the the Tribunal did not accept the plea that the value of the goods cannot be loaded in view of the fact that the loading was not contested by the appellants therein before the adjudicating authority.Vikas Spinners v. Commissioner of Customs, Lucknow reported in 2001 (128) ELT 143, was cited to point out that it was held in paragraph 7 of the order that having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection the person concerned is legally estopped from taking a somersault and deny the correctness of the same.Swati Growth Funds Ltd. v. Collector of Customs, Madras reported in 1995(79) ELT 247 was cited to point out that it was held that since the appellant had not contested the valuation and had merely stated that they accepted the value only for assessment purposes, they had taken the consequences of under-valuation and consequently the order of the concerned authority confiscating the goods was required to be upheld.7. In the letter dated 17.7.2002 around which the contentions have revolved, it was categorically stated by the appellant that he had been informed by his Custom House Agent (CHA) to accept the loading on the transaction value for the consignment in question. It was then stated" .... hereby I inform that I am ready to accept the loading and also do not want any show cause notice, while loading the value you may please take into the account contemporary price of the similar or the identical consignment, may be please taken into consideration". It is evident from this communication that the appellant clearly waived the show cause notice required to be issued under Section 124 of the said Act which reads as follows: "SECTION 124. Issue of show cause notice before confiscation of goods, etc.-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 (a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral." 8. It is clear from the above provisions of the Section 124 of the Act that issuance of show cause notice, is mandatory and by way of a pre-condition to making of any order of confiscation or imposing any penalty on any person under chapter XIV. The contents of the show cause notice contemplated under the said provisions are separately enumerated in clauses (a), (b) and (c) thereof. Clause (a) of Section 124 speaks of informing the owner of the goods or the concerned person of the grounds on which it is proposed to confiscate the goods or to impose the penalty. Clause (b) of Section 124 points out the nature of the opportunity by stating that a representation in writing could be made, within such reasonable time as may be specified in the notice, against the grounds which are informed in writing under clause (a). Clause (c) of Section 124 provides for a reasonable opportunity being heard to be given to the owner, or the concerned person. Under the proviso it is laid down that notice referred to clause (a), that is, of informing the owner or concerned person of the grounds, and the representation referred to in clause (b) made at the request of the concerned person may be oral if so desired. It would, therefore, be clear that if the person concerned makes a request that he may be informed about the grounds orally and be allowed to make representation orally then in that event, he need not be given the notice of grounds in writing and he can be allowed to make his representation orally. Such a situation cannot be said to be a waiver of the right. It is only change of manner in which the right is availed of at the option of the person concerned.. There is, therefore, no substance in the contention canvassed on behalf of the appellant that there was a waiver of the show cause notice and not waiver of personal hearing by way of oral representation. The doctrine of waiver has no application in a situation where the person concerned requests for the grounds being orally communicated to him and wants the representation being orally made by him, because, the contents of the notice and the nature of opportunity requirements would eve in that event stand satisfied and no question of waiver would arise, since, only the manner of communication of grounds and making of representation would be changed from writing to oral.
9. The provisions of Section 124 of the said Act embody the principle of natural justice of audi alterem Partem that no one shall be condemned unheard. The power of confiscation of goods under Chapter XIV has a drastic consequence of depriving a person of his property which by virtue of being confiscated would vest in the Central Government under Section 126 of the Act. The provisions of Section 124 have, therefore, been framed in a mandatory from and even the CEBC by its circular No. 65/2000-Cus. Dated 27.7.2000 exhorted all concerned in the context of Section 124, that the adjudicating authorities shall follow the principles of natural justice contained in Departmental Adjudication Manual, both in letter and spirit.
10. Existence of grounds on which the goods are proposed to be confiscated is a precondition to issuance of notice under Section 124.
Without the information to the concerned person about the nature of the ground (s) on which the proceedings for confiscation are proposed to be undertaken, it would not be possible for such person to defend himself by putting forth his explanation and pointing out the relevant material in order to convince the concerned authority that confiscation of goods would not be justified and warranted under the law. For this, along with the information about the ground (s) on which it is proposed by the concerned authority to confiscate the goods, adequate time is to be given to enable the concerned person to make the representation both against the grounds on which he is informed and the penalty proposed in the notice under clause (b) of Section 124 of the Act. Clause (c) of Section 124 has a bearing on the nature and contents of the type of hearing given in the case which should be such as would enable the noticee to effectively represent his case.
11. It is, therefore, obvious that the authority empowered to proceed under Section 124 is duty bound to issue the requisite notice satisfying all the ingredients statutorily incorporated therein and there is no option to the authority to proceed to confiscate the goods without issuing such notice. The notice contemplated under Section 124 of Act, however, is essentially for the benefit of the person concerned. Having received the notice and being informed about the grounds for proposed confiscation, such person may choose not to defend himself and inform the authority concerned that he does not want to defend himself or he may waive his right to make a representation and leave it to the authority concerned to take a decision on the basis of the existing record. In such an event, he waives his right to make a representation. The person concerned may waive his right to make a representation in writing, yet may want to be heard against the proposed penalty in which event he is required to be heard and if personal hearing is sought, may have to be given a personal hearing.
The person concerned may indicate that he neither wants to represent against the grounds or the proposed penalty, nor does he want to be heard in which event he forgoes the right given under Section 124 and allows the authority to proceed with the matter. In such a case, the notice cannot turn around after the order is made and contend that he was denied a reasonable opportunity of being heard before the order of confiscation was made. Therefore, when right to make a representation and be heard is waived by the noticee on receiving the notice which also informed him about the ground(s) on which it was proposed to confiscate goods, there would arise no question of any violation of the principles of natural justice because the waiver of hearing would be after having known the ground (s) and about his right to defend, as offered in the notice, and therefore, an intelligent waiver for which the concerned authority cannot be blamed.
12. The notice under Section 124 has its basis in the existence of the grounds for confiscation available in Chapter XIV of the Act. without knowing the ground(S) on which the confiscation is proposed, it would not be possible to waive the right to make a representation and be heard. One must know why the opportunity of being heard is being given to him and to what is he supposed to respond in order to avoid consequences prejudicial to him, Therefore, when a person does not know the ground(s) on which confiscation of good is proposed, he would not know what to defend and how to defend. In such a case, he would not be in a position to understand the context in which he is given the opportunity to be heard, and the waiver of right to be heard will not be an intelligent waiver. Therefore, the information about the grounds is the very basis on which the concerned person can decide whether to avail of the opportunity of being by making a representation and show cause against the proposed action. The information abut the grounds has to be communicated by notice, as required by clause (a) of Section 124 and in the absence of knowledge about the grounds of the proposed confiscation, there cannot be an intelligent and understanding waiver of hearing and in a case where the information about the grounds is not communicated under any notice as required under Section 124(a), the waiver of opportunity of being heard contemplated by clause (b) and (c) of Section 124 would become ineffective. However, in a case where the ground for proposed confiscation is already know not the person concerned and he has waived the communication of such information as well as the opportunity of being heard as contemplated by section 124 he foregoes the personal benefit of hearing, having come to know about the grounds and requests the authority concerned to proceed with the matter as there is, according to him, no need to issue notice under Section 124 of he has already the information of the ground on which confiscation is proposed and does not want to make a representation or be heard. Such a course adopted by the owner of the goods or by the other concerned person who is entitled to a notice under Section 124 should be explicitly borne out from the record in order to indicate an understanding and intelligent waiver of all the ingredients of Section 124 contained in clause (a), (b) and (c) thereof. Having regard to the drastic consequences of confiscation proceedings the authority empowered to confiscate is under an obligations the authority empowered to confiscate is under an obligation to satisfy itself whether the concerned person has made an understanding and intelligent waiver of his right to be heard after having known the ground (s) on which confiscation is proposed.
13. In the present case, the contents of the letter dated 17.7.2002 sent by the appellant clearly indicates that the appellant knew about the ground on which the confiscation would be proposed. The appellant is no uncertain terms requested the concerned authority not to issue the show cause notice and also requested him to enhance the value of the consignments by taking into account the contemporary right of identical consignments. The appellant, therefore, led the concerned authority into not issuing the show cause notice under Section 124 and required to load the value of the consignment, as requested by the appellant. The question of confiscation in the context of the value of consignment could arise under clause (m) of Section 111 of the Act which, inter alia, provides that when any goods which do not correspond in respect of value or in any other particulars with the entry made under the Act in respect thereof, such goods shall be liable to confiscation. Therefore, when the present appellant showed his readiness to accept the loading of the value by the concerned authority, he was fully aware of the ground on which the confiscation could be made, because, such loading had a nexus with ground (m) under Section 111 under which the confiscation could be made and for which the show cause notice under Section 124 would be issued. The appellant simultaneously declared in the said letter that he did not want any show cause notice, leaving it to the concerned authority to load the value by taking into account contemporary price of similar consignments. The waiver of opportunity of being heard was, therefore, made in the context of the information already acquired by the appellant about the ground on which the confiscation was to be proposed and opportunity be given to him under section 124 by issuing a show cause notice. The appellant was advised by his own Clearing House Agent in the matter and the letter dated 17.7.202 seems to have been written after due declaration and understanding the consequences of such waiver. The appellant, therefore, cannot ward off the consequences of such "understanding and intelligent" waiver of the show cause notice under Section 124 of the Act.
14. From the impugned order it is clear that the Commissioner has taken the contemporary price of similar consignments before making the impugned order confiscating the goods under Section 111 (m) of the Act and imposing the penalty.Commissioner of Customs, Mumbai v. Virgo Steels reported in 2002 (141) ELT 598 (SC) was rendered in the context of provisions of Section 128 of the said Act, the ratio reflected in paragraphs 14 and 15 of the Judgement would directly apply even in respect of notice under Section 124 of the Act. Relying on the decision of the Privy Council in Vellayan Chettair v. Government of Province of Madras reported in AIR 1947 PC 197 in which it was held that even though Section 80 CPC was mandatory, still non-issuance of such notice would not render the suit bad in the eye of law because such non-issuance of notice can be waived by the party concerned, the Supreme Court held, in paragraph 14 of its judgments, that it is clear that even though a provisions of law is mandatory in its operation if such provision is one which deals with the individual right of person concerned and is for his benefit, the said person can always waiver such a right. Section 124 makes it obligatory on the concerned authority to issue notice to the person concerned informing him about the grounds for the proposed action and offering him an opportunity of being heard by showing cause against the proposed action. The requirement of Section 124 of issuing notice is not in the nature of issuing a public notice; nor any person other than the person against whom the proceeding is initiated has any right to such a notice. It is the right of notice to the person concerned, and the same can be waived by the person. Therefore, the ratio of the decision of the Supreme Court in Virgo Steels (supra) decided in the context of Section 28 of the said Act would be applicable with equal force even to waiver of notice required to be issued under Section 124 of the Act. In view of the settled legal position, as reflected in Virgo Steels (supra) the decisions of the Tribunal on which reliance is placed, to the extent they hold that despite the waiver of right to be heard under Section 124 hearing should nonetheless be given, being in conflict with the ratio of the said decision of the Supreme Court, ceased to be binding precedents.
16. For the foregoing reasons, the contentions raised on behalf of the appellants, cannot be accepted and we find no warrant for interference with the impugned order of the Commissioner which is valid and legal.
The appeal is, therefore, dismissed.