2019 (2) TMI 1444 - HC - Customs

Auction of goods - whether the goods were Hot Rolled or Cold Rolled? - Release of goods - Held that - The reports of Bokaro Steel Plant were received directly in the Court which were opened and it was opined therein that the material was Cold Rolled Steel as is clear from the order dated 8.7.2016 (Annexure P-12). This Court vide order dated 12.7.2016 (Annexure P-14) ordered for release of the goods and as regard the variation of thickness of the goods as raised by respondent No.1 vide affidavit dated 12.7.2016 (Annexure P-13), petitioner No.1 was directed to furnish the bank guarantee. Since the goods were found to be Cold Rolled , respondent No.2 assessed the Bills of Entries and ordered for release of the goods vide out of charge order, Annexure P-16. Vide letter dated 2.8.2016 (Annexure P-17), respondent No.2 returned the Bank Guarantee of the petitioners. We dispose of the present petitions by granting liberty to the petitioners to file a detailed and comprehensive reply to the show cause notice dated 13.12.2016 (Annexure P-1) raising all the pleas as raised in the present writ petition before the appropriate authority within a period of one month from the date of receipt of the certified copy of the order.

Summary

Issues:
1. Jurisdiction and validity of the show cause notice dated 13.12.2016.
2. Time limitation for challenging the show cause notice.

Analysis:

Issue 1: Jurisdiction and validity of the show cause notice dated 13.12.2016
The petitioners filed a writ petition under Articles 226/227 of the Constitution of India seeking to quash a show cause notice dated 13.12.2016 and an order dated 23.12.2016 issued by the court. The petitioners were engaged in the business of importing and trading Cold Rolled Sheets/Coils. The goods imported by the petitioners were detained by the authorities, and various legal proceedings ensued, including examination of the goods by a Chartered Engineer and testing by different laboratories. The court ordered the release of the goods based on reports indicating that the goods were Cold Rolled Steel. However, during the pendency of the writ petitions, a show cause notice was issued demanding differential customs duty, safeguard duty, and confiscation of goods along with interest and penalty. The petitioners challenged the jurisdiction and validity of this show cause notice, arguing that it was without jurisdiction and time-barred.

Issue 2: Time limitation for challenging the show cause notice
The petitioners contended that the show cause notice dated 13.12.2016 was time-barred and should be quashed. On the other hand, the respondent argued that the petitioners were liable to pay the amount as demanded in the notice. After hearing arguments from both parties, the court disposed of the petitions by granting the petitioners the liberty to file a detailed reply to the show cause notice within one month. The court directed the concerned authority to consider the reply, make a decision in accordance with the law, and provide an opportunity for the petitioners to be heard within three months from the receipt of the reply. The petitioners were also allowed to present evidence to support their claims before the authority.

In conclusion, the court did not express any opinion on the merits of the case but provided the petitioners with an opportunity to respond to the show cause notice and have their arguments considered by the appropriate authority within a specified timeframe.