Order date – 29 August 2022

Facts – 

• The Respondent, M/s HLPL Global Pvt. Ltd and anr., were served a corrigendum dated 02.02.2016 without the show cause notice and it is during the hearing that the respondents were served with the show cause.
• The SCN was issued by Directorate of Revenue Intelligence because they received an intelligence that some traders/exporters were exporting goods described as floor covering (braided) of man-made fiber and were availing export incentives under the Duty Drawback and Focus Products Scheme. During physical examination of the goods it was observed that the aforesaid goods were machine made and not hand-made or braided as declared in the export documents.
• During adjudication, the two respondents appeared and stated that since show cause notices had not been issued to them, penalty cannot be imposed, which was then set aside by the adjudicating authorities.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether without issuance of show cause notice, penalty can be imposed?

Order – 

• The Tribunal observed that the penalty could not have been imposed upon the two respondents if opportunity was not provided to the respondents to file a reply to the show cause notice.
• Also the show cause notice also does not contain any allegation against the respondents. 
• Therefore, the appeals were dismissed.