By TIOL News Service

MUMBAI, DEC 20, 2017: THE Petitioner sought a direction to the respondents to withdraw the letter dated 7th September, 2017 issued by the 2nd respondent. The impugned letter is a communication to the petitioner inviting its attention to a show cause notice bearing F. No. DRI/BZU/E/4/99 dated 28th March, 2002.

The communication purports to inform the petitioner that a personal hearing is fixed on 3rd October, 2017 at 11:30 a.m. before the Commissioner of Customs, Air Cargo Complex (Import) in furtherance of this show cause notice and the petitioner must attend the same.

The petitioner submits that during the period of dispute, namely, January, 1998 to June, 1999, the petitioner imported Global Maritime Distress Safety System equipment required for repair of ocean vessels without payment of duty and was directly sent to the vessel. It is alleged that there was investigation carried out by the officers of the DRI on the basis of certain information made available; statements were recorded and a demand notice was served; that the petitioner voluntarily complied inasmuch as the duty liability was deposited.

Incidentally, the SCN dated 28th March, 2002 proposed appropriation of the amount deposited towards duty and so also proposed imposition of penalty and interest.

The petitioner replied to the SCN on 14th September, 2002.

In the year 2004, the petitioner was called for a personal hearing after which there was no communication from the respondents till the receipt of the present letter dated 7 September 2017 and which is after more than 15 years of the issuance of the SCN and 13 years after the last hearing.

And the above is the reason that the petitioner has requested for quashing the subject communication and consequently, the show cause notice and/or a direction to the respondents to withdraw it.

The petitioner also submits that the duty liability has been voluntarily paid and they have not sought any refund thereof; that lack of vigilance and expediency on the part of the respondents should not result in causing grave and serious prejudice to the petitioner, for the petitioner has absolutely no records available of such an old transaction; the transaction dates back to 18 years, namely, 1999 and for 15 years there was no adjudication or a final order made and, therefore, the petitioner had a reasonable belief that the proceedings are dropped; that except the reply to the show cause notice they have not maintaned any records; that today there is nothing available so as to disprove or falsify the allegations in the show cause notice. Reliance is placed in support on the decision in Lanvin Synthetics Private Ltd. Vs Union of India - 2015-TIOL-1668-HC-MUM-CUS.

The counsel for the Revenue submitted that the matter was transferred to the Call book and only when the Supreme Court rendered its final judgment on 26th March, 2015, that the Department/Revenue took a decision on 18 January 2017 to take out the matters from the call book and adjudicate these notices.

Inasmuch as since in these circumstances, there is no deliberate or malafide attempt on the part of the respondents in not adjudicating the show cause notice, the petition needs to be dismissed.

After taking note of the decisions in Cambata Indus. Pvt. Ltd. - 2010-TIOL-133-HC-MUM-FEMA, Government of India vs Citedal Fine Pharmaceuticals Madras & Ors., - 2002-TIOL-680-SC-CX, Lanvin Synthetics Private Ltd. - 2015-TIOL-1668-HC-MUM-CUS, the High Court inter alia observed -

+ it may be a procedural aspect for the Department/Revenue (to send matters in the dormant list/call book).

+ unless and until the Revenue establishes that there is a law mandating taking cognizance of these procedural requirements or these procedural requirements have been engrafted into the applicable legislation so as to enable the Revenue/Department to seek extension of time, in writ jurisdiction, we are not obliged to take notice of these procedural delays at the end of the Revenue/Department.

+ accepting that case would defeat the rule of law itself. That would also result into taking cognizance of extraneous matters and basing our conclusion thereupon would then mean violating the principles laid down in the binding judgments of this Court and the Hon'ble Supreme Court. That the matters of present nature have to be concluded expeditiously and within a reasonable time.

+ we have not found from any of these averments and statements in the affidavit that there was a bar or embargo, much less in law for adjudicating the show cause notice.

+ now allowing the Revenue to pass orders on the subject show cause notice would mean we ignore the principle of law referred above. Secondly, we also omit totally from our consideration the complaint of the petitioner that in a matter as old as of 1999, if now the adjudication has to be held, it will be impossible for them to trace out all the records and equally, contact those officials who may not be in their service any longer. Thus, they would have no opportunity, much less reasonable and fair, to defend the proceedings. That is equally a balancing factor in the facts and circumstances of the present case.

+ we are of the firm opinion that insofar as the petitioner before us is concerned, the Revenue/Department has not been able to justify its lapse in not adjudicating the show cause notice issued on 28th March, 2002 for more than 15 years. There may be reasons enough for the Revenue to retain some matters like this in the call book, but those reasons do not find any support in law insofar as the present petitioner's case is concerned.

Order:

++ we direct that the subject show cause notice cannot be adjudicated further and all proceedings in pursuance thereof are quashed and set aside. However, we at once clarify that this order and direction is applicable and restricted only to the case of the petitioners before us. No benefit of the same can be derived by other parties for they are not before us. The Revenue is free to take such steps as are permissible in law as against the others.

The Writ Petition succeeds.

(See 2017-TIOL-2618-HC-MUM-CUS)