Adjudication: Notice, Hearing and the Order

In one line

Adjudication is the quasi-judicial process by which a customs officer decides whether goods are to be confiscated and a penalty imposed. Precisely: section 122 says who may adjudge; section 122A prescribes the procedure; and section 124 requires a show cause notice and an opportunity of being heard before any confiscation or penalty.

Why adjudication rather than prosecution

Because the overwhelming majority of customs contraventions are not crimes and should not be tried as such. A misdeclared value, an unobserved end-use condition, a short-landed manifest: these need a decision, a quantification and a remedy, not a criminal trial.

So the Act gives the department an adjudicatory jurisdiction. An officer determines liability, on the civil standard of preponderance of probability, and orders confiscation or penalty; the criminal courts are reserved for the offences in Chapter XVI, and even then only with sanction under section 137.

But an officer deciding a case in which his own department is the interested party is a structural difficulty, and the Act's answer is procedural: a notice stating the grounds, a right to be heard, an order in writing, and a full appellate ladder. Section 124 is where those guarantees live, and it is the section to lead with in any answer on adjudicatory proceedings.

Section 122: who adjudicates

Section 122, as substituted by the Finance Act 2018, provides that in every case under this Chapter in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged:

(a) without limit, by a Principal Commissioner of Customs or Commissioner of Customs, or a Joint Commissioner of Customs;

(b) up to such limit, by such officers, as the Board may, by notification, specify.

The change from the earlier text must be stated because it is a recorded trap. Before 2018 the section itself fixed value-based tiers: a Deputy or Assistant Commissioner up to a stated value of goods, a gazetted officer lower down up to a smaller value, and so on. Those tiers have been removed from the section entirely. The section now names three ranks who adjudicate without limit and leaves every other limit to be fixed by Board notification. An answer that recites the old value tiers as the present law is describing a provision that has been substituted.

The reason for the change is administrative flexibility. Values move, and a limit written into a statute becomes obsolete and requires an amending Act; a notification can be revised. The cost, which a critical answer may note, is that the distribution of adjudicatory power is now settled by the executive rather than by Parliament.