IMPORTANT POINT
A person charged with misdeclaration is entitled to know that ground on the basis whereof he would be penalized.

JUDGMENT

S.B. Sinha, J. —

1.Leave granted.

2.Appellant No.2 is a proprietory concern of the First Appellant which is importer of various items of goods including Lithopone. Appellant No.1 placed an order for import of 21.5 MT of Lithopone 28-30% (pigment), with Texpo International, Hong Kong. The said item is used in manufacture of paint. It is a freely importable item. When the goods arrived at the port, a bill of entry for 21.5 MT of Lithopone was filed. The requisite custom duty after assessment was paid. However, on physical verification, out of the imported items 400 bags of 25 kg. each contained in a yellow coloured substance suspected to be ‘Tetracycline HCL BP 93’, a chemical used for making medicines was found wherefor an import licence was required to obtained.

3.A search and seizure was carried out and on examination, it was found that 189 poly bags out of 860 poly bags contained a white coloured chemical and the remaining 671 poly bags contained a yellow coloured chemical. The estimated value of the mis-declared item was estimated at Rs.1,02,97,166/-.

4.A notice under Section 124 of the Customs Act, 1962 (for short, ‘the Act’) was issued on appellants on 8.3.2000 asking them to show cause as to why the consignment said to be valued at Rs.63,32,018.60 CIF should not be confiscated under Section 111(d) and 111(m) of the Act, 1962 and as to why the importers and their agents should not be punished in terms of Section 112(a) and (b) thereof. Cause was further directed to be shown as to why the appellants attempted evasion of custom duty amounting to Rs.38,16,729.40 resulting from mis-declaration of the imported goods should not be directed to be paid and as to why the said amount shall not be recovered along with interest.

5.Appellants in their cause shown pursuant thereto contended that their foreign supplier had sent 10 MT of Tetracycline by mistake. The mistake was accepted by the exporter M/s Texpo International in a letter dated 25.10.2000. The correspondences between the parties were placed before the authority to show that no penal action, as was proposed, should be taken against them.

6.By reason of an order dated 29.12.2000, however, the goods were not only directed to be confiscated but also a penalty of Rs.5,00,000/- was imposed on the company. A personal penalty of Rs.1,00,000/- was imposed on Appellant No.2.

7.An appeal preferred thereagainst before the Customs, Excise and Gold Control Appellate Tribunal, Calcutta was dismissed by an order dated 19.4.2002. A writ petition was filed thereagainst which by reason of the impugned judgment has been dismissed.

8.Mr. J.K. Srivastava, learned counsel appearing on behalf of the appellant, submitted that before the impugned order was passed by the authorities of the Customs Department, admittedly an enquiry was conducted at various places. However, the documents collected during the said enquiry were not supplied to them although reliance was placed thereupon and, thus, the principles of natural justice have been violated.

9.Mr. P.V. Shetty, learned senior counsel appearing on behalf of the respondent, on the other hand, urged that in the peculiar facts and circumstances of this case, it was not necessary to comply with the principles of natural justice as the mistake on the part of the exporter was accepted.

10.Indisputably declaration was made in regard to the import of Lithopone. It is also not disputed that a part of the imported items contained Tetracycline HCL.

11.We may furthermore place on record that the consignment has since been sent back to the exporter. Despite the same, as noticed hereinbefore, redemption fine as also other penalties have been imposed. The show cause notice is a detailed one. It is stated therein that through departmental source, overseas enquiries had been carried out.

12.The information which was gathered during the said overseas enquiry through departmental source, however, was not final and conclusive. Be that as it may, concededly, no documen