2006 (9) TMI 39 - HC - Customs

Recovery of dues - Limitation - Long delay does not result in immunity from payment of duty in absence of any statutory provision - Department plea that due to mixing of file found not to be genuine

Summary

Issues:
1. Quashing order of recovery under section 142(1) of the Customs Act, 1962.
2. Delay in recovery of assessed customs duty.
3. Applicability of judgments related to recovery of dues.
4. Effect of delay in initiating recovery proceedings under different statutory provisions.

Analysis:

1. The petition sought to quash the order of recovery under section 142(1) of the Customs Act, 1962, based on a detention notice issued by the Commissioner of Customs. The petitioner's case involved the import of a machine under the Open General Licence scheme, which was later seized and duty was assessed. The demand for duty was made after a significant delay, leading to the contention that authorities were debarred from recovery due to the passage of time.

2. The petitioner argued that the delay in taking steps for recovery of assessed customs duty should debar the authorities from enforcing recovery. However, the revenue's counsel contended that the delay was due to a mix-up in files and should not prevent recovery. The court held that once duty was due and payable, delay alone could not provide immunity from payment. The lack of statutory provisions for immunity based on delay meant that recovery could not be barred solely on those grounds.

3. The petitioner relied on judgments from the Bombay High Court and the Supreme Court to support their case. However, the court found these judgments to be distinguishable as they related to different aspects such as assessment, penalty proceedings, and demand of interest, rather than the recovery of dues. The court emphasized the need for timely recovery of government dues, despite acknowledging the importance of swift action in such matters.

4. The court referred to a Supreme Court decision regarding delay in initiating proceedings for levy of damages under the Employees (Provident Fund & Miscellaneous Provisions) Act, 1952. The principles outlined in the Supreme Court decision were found to be applicable to the present situation, where a delay of 14 years in initiating recovery action was noted. The court concluded that the impugned recovery was not without jurisdiction, emphasizing the importance of taking appropriate steps to address delays and hold responsible parties accountable.

In conclusion, the court dismissed the writ petition but directed the respondent to investigate the causes of delay and take necessary actions within a specified timeframe.