2023 (4) TMI 723 - HC - Customs

Delay of 14 years in concluding the proceedings - failure to fulfill the condition of N/N. 21/2002- Cus dated 01.03.2002 - goods imported by the respondent has not at all been received in their declared factory premises and diverted to local market in Delhi - HELD THAT - It is seen that there was a delay of 14 years in concluding the proceedings. Though the show cause notice was issued on 9th November, 2004 and reply was submitted by the respondent on 21st March, 2005 and the respondent was heard in person, the final order of adjudication was passed on 29th June, 2018. The learned Tribunal noted that there is nothing on record to indicate that the respondent attributed to the delay in completion of the proceedings whereas in the order of adjudication it has been noted that there were multiple personal hearings conducted in the matter but there was no explanation for the delay of 14 years. In any event, a matter cannot be kept indefinitely pending as it will virtually be a Damocles sword hanging on the head of the assessee. The learned Tribunal was fully justified in coming to the conclusion that in the absence of any explanation for the inordinate delay of 14 years, the rights of the respondent have been affected and it would be in violation of the principles of natural justice. This is sufficient to uphold the order passed by the learned Tribunal. Consequently, the other issues which have been raised by the revenue and suggested as substantial questions of law need not be gone into. Appeal dismissed on the ground that there is no substantial question of law arises for consideration.

Summary

Issues:
1. Delay in completion of proceedings affecting natural justice.

Analysis:
The appeal filed by the revenue under Section 130 of the Customs Act, 1962 challenged the order passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata. The revenue raised substantial questions of law regarding the import of goods by the respondent, alleging diversion to the local market and non-compliance with manufacturing conditions. The Court noted the first issue dealt with by the Tribunal, which was the inordinate delay in completing the proceedings. The Tribunal found a delay of 14 years from the issuance of the show-cause notice to the final order, without any explanation for the delay provided by the department. The Tribunal cited precedents from the Bombay High Court and the Gujarat High Court emphasizing that such delays violate natural justice and vitiate proceedings. The Court agreed with the Tribunal's findings, stating that the delay impacted the respondent's rights and contravened principles of natural justice. Consequently, the Court upheld the Tribunal's order based on this ground alone, without delving into the other substantial questions raised by the revenue.

In conclusion, the appeal was dismissed as no substantial question of law arose for consideration. The Court's decision was based on the significant delay in the proceedings, which was found to violate natural justice principles. The connected application for stay was also closed as a result of the dismissal of the appeal.