2010 (12) TMI 826 - HC - Customs

Second Notice - Extended period of limitation - in view of the Supreme Court decision in the matter of Commissioner of Customs and Central Excise v. Charminar Nonwovens Ltd., (2004 -TMI - 46963 - SUPREME COURT OF INDIA) wherein the Hon ble Supreme Court considered that there was an earlier decision and yet in subsequent matters the notices were issued. The Hon ble Supreme Court was of the view that such notices can be issued and not liable to be challenged under Article 226 of the Constitution of India. In view of the findings of the Hon ble Supreme Court in its decision, the argument of the learned counsel for the petitioners that by the decision of the Commissioner the issue had already been settled and it operates as issue estoppel, does not stand to reason because doctrine of issue estoppel does not apply in this case. The Investigation of facts in the matter that whether the notices are sustainable or not, should better be done by the department authorities and we, in that view of the matter, refrain from interfering in the matter of issuance of notice. It would not in fitness in observing against the department that it has no jurisdiction to issue the notices. The petitioners would be at liberty to go before the department and join issue there. - Petition dismissed.

Summary

Issues Involved:
1. Request for documents related to sample testing.
2. Validity of show cause notices.
3. Alleged suppression of facts and misrepresentation.
4. Jurisdiction and authority to issue notices.
5. Delay in filing the writ petition.

Issue-wise Detailed Analysis:

1. Request for Documents Related to Sample Testing:
The petitioners, manufacturers of carbon compounds, sought a writ of Mandamus to compel the respondents to provide copies of all documents concerning the forwarding of samples to government agencies and the test reports issued by these agencies, as mentioned in the show cause notice dated May 9, 2007. The petitioners argued that the lack of these documents constituted material suppression, undermining the validity of the show cause notices.

2. Validity of Show Cause Notices:
The petitioners challenged the show cause notices dated November 22, 2007, and September 17, 2008, on the grounds that they were issued without sufficient material evidence. They cited a previous order by the Commissioner dated May 9, 2007, which extended the time for issuing show cause notices due to the absence of a chemical examiner's report. The petitioners argued that this order operated as "issue estoppel" against the respondents, preventing them from issuing further notices.

3. Alleged Suppression of Facts and Misrepresentation:
The petitioners contended that there was no suppression of facts on their part, as the department had full knowledge of their activities. They relied on Supreme Court judgments, including *Larsen & Toubro Ltd. v. Commissioner of Central Excise, Pune-II* and *Collector of Central Excise v. M/s. Chemphar Drugs and Liniments*, to argue that allegations of fraud or suppression must be explicitly stated and proven. The petitioners asserted that the extended period of limitation for issuing notices was not applicable in their case due to the lack of proven misrepresentation.

4. Jurisdiction and Authority to Issue Notices:
The respondents argued that the petitioners had not challenged the jurisdiction or authority of the notice-issuing body. They maintained that the notices were issued based on evidence, including a statement from the petitioners' supervisor, indicating misrepresentation in the production process. The respondents cited the Supreme Court decision in *Commissioner of Customs and Central Excise v. Charminar Nonwovens Ltd.*, which held that such notices could not be challenged under Article 226 of the Constitution of India.

5. Delay in Filing the Writ Petition:
The respondents highlighted the delay in filing the writ petition, noting that the petitioners had appeared before the department but did not file a written submission. The writ petition, prepared in 2009, was filed in 2010, suggesting a belated and delayed action. The respondents argued that this delay undermined the petitioners' position and indicated a lack of urgency in their challenge.

Judgment:
The court dismissed the writ petition, stating that the investigation of facts and the validity of the show cause notices should be determined by the department authorities. The court emphasized that it was not appropriate to interfere in the issuance of notices under Article 226 of the Constitution of India. The court concluded that the petitioners should address their grievances before the department and that any observations made in the judgment would not prejudice the department's investigation. The petition was considered meritless and dismissed.