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2010 (10) TMI 423 - HC - Central ExciseDrawback duty - Fixation of brand rate - Rule 12A of the Central Excise Rules - Notification No. 166/81 dated 23-9-1981 - Principle of natural justice - Under the scheme of levy of excise, Tea was required to bear duty of excise first at the garden stage and then at the packing stage after it was blended and packed - the issue in Writ Petition No. 2611 of 1988 was in respect of the communications by which the applications of the Petitioners for fixation of brand rate were rejected - It is pertinent to note that except referring to the said Writ Petition in the subject column of the order, there is absolutely no reference to the issues arising in the said Writ Petition No. 992 of 1987 in the body of the impugned order except the operative part - In the case of Universal Generics Pvt. Ltd. v. Union of India (1993 -TMI - 43624 - HIGH COURT OF BOMBAY) - Held that The underlying principle laid down in the said judgments is that in absence of any period of limitation, it is required that every Authority is to exercise the power within a reasonable period - Decided against the assessee.
Issues Involved:
1. Retrospective withdrawal of duty drawback granted to the Petitioners. 2. Rejection of the Petitioners' applications for fixation of brand rate of drawback for export of tea. 3. Alleged breach of principles of natural justice. Detailed Analysis: Retrospective Withdrawal of Duty Drawback: The Petitioners challenged the order dated 30-9-2005, which confirmed the retrospective withdrawal of the duty drawback granted to them. This issue was originally raised in Writ Petition No. 992 of 1987, where the Petitioners contested the revocation letters dated 19-1-1987 and 20-1-1987. The Court noted that the Respondents had failed to pass an order on this issue despite a hearing on 2-11-1988 and subsequent detailed submissions by the Petitioners. The Court observed that the Respondents had not complied with the order dated 24-4-1987, which restrained them from enforcing the revocation until a proper hearing and a speaking order were provided. The Court found that the Respondents had clubbed this issue with the issues in Writ Petition No. 2611 of 1988 without proper adjudication, violating the principles of natural justice. Given the undue delay of 17 years in adjudicating this issue, the Court quashed the impugned order concerning the retrospective withdrawal of the duty drawback. Rejection of Applications for Fixation of Brand Rate: The Petitioners also contested the rejection of their applications for the fixation of the brand rate of drawback for tea exports. This issue was raised in Writ Petition No. 2611 of 1988. The Court noted that the Respondents had treated the initial rejection communications as show cause notices and directed the Petitioners to file their written explanations. The Respondents were then required to adjudicate these notices and pass a speaking order by 31-8-2003. Despite multiple extensions granted by the Court, the Respondents failed to comply within the stipulated time. The Petitioners challenged an ex parte order dated 15-4-2004, which was set aside by the Court, directing a fresh hearing. The Court observed that the Respondents had ultimately passed an order on 30-9-2005, confirming the rejection of the applications for fixation of the brand rate. The Petitioners did not challenge this part of the order, and the Court confirmed the rejection of the applications. Breach of Principles of Natural Justice: The Petitioners argued that the issues in Writ Petition No. 992 of 1987 and Writ Petition No. 2611 of 1988 were distinct and should not have been clubbed together. The Court agreed, noting that the issues in Writ Petition No. 992 of 1987 pertained to the retrospective withdrawal of the duty drawback, while Writ Petition No. 2611 of 1988 concerned the rejection of applications for fixation of the brand rate. The Court found that the Respondents had violated the principles of natural justice by not providing a proper hearing on the issues in Writ Petition No. 992 of 1987 and by unduly delaying the adjudication. Given the significant delay and the end of the relevant scheme, the Court decided not to remand the matter back to the Respondents. Instead, it quashed the impugned order concerning the issues in Writ Petition No. 992 of 1987. Conclusion: The Court quashed the impugned order dated 30-9-2005 concerning the retrospective withdrawal of the duty drawback due to the breach of principles of natural justice and undue delay. The rejection of the Petitioners' applications for the fixation of the brand rate was confirmed, as the Petitioners did not challenge this part of the order. The Petition was thus partly allowed.
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