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Issues involved: Interpretation of Section 116 of the Customs Act regarding the time limit for issuing show cause notice for short-landed goods by Agents of foreign flag Vessel "Duke" at the Port of Bombay in 1983.
Summary: The petitioners, who were Agents of the Vessel "Duke," filed an Import General Manifest at the Port of Bombay in March 1983. Subsequently, a show cause notice was served in 1995 by respondent No. 1, claiming certain goods were short-landed and demanding an explanation or imposing penalties under Section 116 of the Customs Act. The petitioners challenged the notice under Article 226 of the Constitution of India. The petitioners argued that the provisions of Section 116 should not be invoked after more than 12 years from the date of the vessel leaving the Port of Bombay. The Court agreed, stating that the delay of 12 years in issuing the notice was unreasonable and arbitrary. It was emphasized that actions under Section 116 must be taken within a reasonable time frame, with reference to a precedent where a period of five years was deemed appropriate. The Court ruled that the show cause notice issued after such a prolonged period could not be upheld, and the petition was successful. In conclusion, the Court made the rule absolute in favor of the petitioners, with no order as to costs.
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