2014 (10) TMI 43 - HC - Customs

Seizure of the goods - Provisional release goods - Held that - Petitioner s case is that no duty is payable on the subject goods, as the same were to be used in execution of a Contract with ONGC and the petitioner was also given an Essentiality Certificate (EC) issued by the Director General of Hydrocarbons. Therefore, the subject goods are exempted from payment of Customs duties by virtue of Notification No. 21/2002, dated 1 March, 2002. However, the grievance of the petitioner is that the respondents-authorities are deliberately delaying the issuance of show cause notice as the petitioner has deposited the duty amount as far back as in December, 2011 and February, 2012. It is, therefore, submitted that in view of the gross delay, serious prejudice is being caused to the petitioner as its claim for exemption is being delayed resulting into delay in return of the amounts deposited under protest - request for eight weeks to issue show cause notice is unreasonable. This is so as the petitioner has already deposited the duty amount in December, 2011 and also furnished bank guarantee to the respondent-Revenue to secure its due more than a year ago. - revenue directed to issue a show cause notice to the petitioner within four weeks from today The show cause notice to be adjudicated within six weeks from the date of issuance of the show cause notice.

Summary

Issues:
Seizure of goods under panchanama, return of Bond and Bank Guarantee, delay in issuance of show cause notice, exemption from Customs duties, unreasonable delay in investigations, issuance of show cause notice, adjudication timeline.

Seizure of Goods under Panchanama:
The petitioner sought relief to declare the seizure of goods on 9 November, 2011, as illegal and void. The goods were provisionally released upon furnishing a bank guarantee for the duty amount and a Bond for the assessable value. Additionally, the petitioner paid the duty amount under protest on 2 and 7 December, 2011. The petitioner claimed exemption from duty based on an Essentiality Certificate for executing a contract with ONGC. The delay in issuing a show cause notice was causing prejudice as the duty amount had been deposited since 2011 and 2012.

Delay in Issuance of Show Cause Notice:
The petitioner argued that the authorities were deliberately delaying the issuance of a show cause notice despite the duty amount being deposited earlier. The petitioner claimed exemption from Customs duties under Notification No. 21/2002. The respondent's counsel stated that investigations were ongoing and requested eight weeks to issue the show cause notice. The court found the requested time unreasonable, considering the long delay since the seizure in November 2011. The court directed the respondents to issue the show cause notice within four weeks and adjudicate it within six weeks from the date of issuance.

Return of Bond and Bank Guarantee:
The petitioner also sought the return of the Bond and Bank Guarantee furnished during the provisional release of goods. The court's decision focused on the issuance of the show cause notice within a specified timeline and subsequent adjudication. The judgment provided clear directions to the respondents to comply with the timelines set by the court for issuing the notice and completing the adjudication process. The petitioner's claim for exemption and the delay in investigations were crucial factors in the court's decision-making process.

This summary provides a detailed analysis of the judgment, addressing each issue involved and highlighting the key arguments presented by the petitioner and respondent, leading to the court's decision and the specific directions given to the respondents.