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2019 (8) TMI 1398 - HC - CustomsJurisdiction - power of DRI to issue SCN - delayed/no adjudication of impugned Show Cause Notices - mis-declaration of description and value of goods - Limitation - a period of more than 7 years has expired from the date of SCN Maintainability of writ in view of alternative remedy - HELD THAT - The present petitions are raising question of reasonable period of limitation as well retroactive amendment and as per judgment of Hon ble Supreme Court in the case of State of Punjab Vs. Bhatinda District Co-Op. Milk P. Union Ltd. 2007 (10) TMI 300 - SUPREME COURT writ is maintainable because question of reasonable period of limitation cannot be decided by authorities appointed under relevant statute, thus we find it appropriate to entertain present writ Petitions under article 226 of the Constitution of India. In the present petitions, show cause notice(s) were issued on 02.04.2009, 31.03.2009 19.02.2011. Adjudication was never stayed by this Court or any other Court so Respondents were always free to adjudicate show cause notice. The excuse of non- adjudication tendered by counsel for the Respondents might be ground to extend limitation by passing order in terms of proviso to Section 28 (9) or Section 28 (9A), however in the absence of passing any such order, the Respondent-Department cannot absolve itself from its statutory duty. Petition allowed.
Issues Involved:
1. Jurisdiction of DRI to issue Show Cause Notices. 2. Delayed or non-adjudication of Show Cause Notices. Detailed Analysis: Jurisdiction of DRI to Issue Show Cause Notices: The petitioners challenged the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue Show Cause Notices (SCNs). The court noted that the petitioners had filed writ petitions under Article 226 of the Constitution of India seeking quashing of the SCNs on the grounds of jurisdiction and delayed adjudication. The court referred to previous judgments, including GPI Textile Ltd. Vs. Union of India and Harkaran Dass Vedpal Vs. Union of India, to support the petitioners' contention that the DRI lacked jurisdiction to issue the SCNs. Delayed or Non-Adjudication of Show Cause Notices: The primary issue was the significant delay in adjudicating the SCNs. The petitioners argued that the SCNs had been pending for more than seven years without any adjudication order being passed. The court considered the judgments in GPI Textile Ltd. and Harkaran Dass Vedpal, which established that SCNs should not remain pending beyond a reasonable period. The court emphasized that the reasonable period for adjudication, as per the amended Section 28 of the Customs Act, 1962, is one year from the date of the SCN, extendable by another year under specific circumstances. Case-Specific Details: 1. CWP No. 6862 of 2017: - The petitioner, a Chartered Engineer, was issued an SCN on 02.04.2009 for alleged mis-declaration of goods by Tristar Air Conditioning Pvt. Ltd. The SCN proposed a penalty under Section 112 read with Section 114AA of the Customs Act. The petitioner received a hearing notice on 10.03.2017 and requested a copy of the SCN, which was provided on 28.03.2017. The court noted that the SCN had not been adjudicated for over ten years. 2. CWP No. 6863 of 2017: - The petitioner, engaged in manufacturing textile products, was issued an SCN on 19.02.2011 for alleged mis-declaration of imported Tow/Fibre. The petitioner requested adjournments and filed a reply on 13.09.2012. Despite a hearing in September 2012, no order was passed until March 2017. The court observed the prolonged delay in adjudicating the SCN. 3. CWP No. 6865 of 2017: - The petitioner, engaged in soap manufacturing, was issued an SCN on 31.03.2009 for alleged mis-declaration of imported Mixed Acid Oil. The petitioner requested cross-examination, which was initially denied but later allowed by the Tribunal. Despite this, the SCN remained unadjudicated. The court noted the unreasonable delay in adjudicating the SCN. Arguments and Consideration: The petitioners' counsel argued that the significant delay in adjudicating the SCNs warranted quashing them, citing previous judgments supporting their position. The respondents' counsel contended that the petitioners had alternative remedies and cited various judgments to support their argument. However, the court found the respondents' preliminary objection regarding the maintainability of the writ petitions to be devoid of merit, as the question of reasonable period of limitation could not be decided by authorities under the relevant statute. Judgment: The court applied the ratio of the Division Bench judgment in GPI Textiles Ltd. and the amended provisions of Section 28 of the Customs Act, 1962. It concluded that the SCNs, pending for more than ten years, were beyond a reasonable period and deserved to be quashed. The court also addressed the retroactive application of the amended Section 28, holding that the amended provisions applied to pending SCNs, requiring adjudication within one year from the date of the amendment or within an extended period under specific conditions. Conclusion: The court allowed the petitions and quashed the SCNs dated 02.04.2009 (CWP No. 6862 of 2017), 19.02.2011 (CWP No. 6863 of 2017), and 31.03.2009 (CWP No. 6865 of 2017), citing the unreasonable delay in adjudication and the retroactive application of the amended Section 28 of the Customs Act, 1962.
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