2025 (3) TMI 1202 - HC - Customs

Delay in adjudicating the show cause notice issued in 2014 - proceedings against other co-noticees when the settlement of duty and interest done by the main firm - HELD THAT - This case would be clearly covered by the previous decisions of this Court in M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General Anr. 2024 (12) TMI 624 - DELHI HIGH COURT where it was held that The flexibility which the statute confers is not liable to be construed as sanctioning lethargy or indolence. Ultimately it is incumbent upon the authority to establish that it was genuinely hindered and impeded in resolving the dispute with reasonable speed and dispatch. A statutory authority when faced with such a challenge would be obligated to prove that it was either impracticable to proceed or it was constricted by factors beyond its control which prevented it from moving with reasonable expedition. This principle would apply equally to cases falling either under the Customs Act the 1994 Act or the CGST Act. In terms of the settled legal position the Order-in-Original dated 30th March 2024 was passed pursuant to the show cause notice dated 30th December 2014 which is almost a ten year old notice. In the opinion of this Court the same cannot be sustained. Accordingly the said Order-in-Original dated 30th March 2024 is set aside and the proceedings against the Petitioners shall stand quashed. Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the delay in adjudicating the show cause notice issued in 2014 is justifiable under the legal framework and precedents.
Whether the settlement of duty and interest by M/s Seiger International at the Settlement Commission affects the proceedings against other noticees, such as Mr. Sandeep Arora and Mr. Gurjit Singh Bains.
Whether the Customs Department's actions, including placing the matter in the call book, were valid and whether they provided sufficient grounds for the delay in proceedings.

2. ISSUE-WISE DETAILED ANALYSIS

Delay in Adjudication of the Show Cause Notice

Relevant Legal Framework and Precedents: The Court referenced previous decisions, notably M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General & Anr. and Vijay Enterprises & Anr. v. The Principal Commissioner of Customs & Anr., which emphasize the obligation of authorities to conclude adjudications expediently. The statutes involved do not sanction indefinite delays.
Court's Interpretation and Reasoning: The Court found the placement of the notice in the call book inadequate to justify the delay. It emphasized that no court had stayed the proceedings, thus the Customs Department should have proceeded with the adjudication.
Key Evidence and Findings: The Court noted the absence of any stay order and the Customs Department's awareness of the Settlement Commission's order, which should have prompted timely action.
Application of Law to Facts: The Court applied the principles from the cited precedents to conclude that the delay was unjustified and that the Order-in-Original could not be sustained.
Treatment of Competing Arguments: The Respondent's argument that the delay was due to legal changes and reassignments was rejected, as these did not constitute valid reasons for the prolonged delay.
Conclusions: The Court concluded that the delay in adjudication was unjustified, and the Order-in-Original was set aside.

Impact of Settlement by M/s Seiger International

Relevant Legal Framework and Precedents: The Settlement Commission's order allowed the Customs Department to proceed against other noticees despite the settlement with M/s Seiger International.
Court's Interpretation and Reasoning: The Court noted that the settlement with M/s Seiger International did not preclude proceedings against other noticees, but the delay rendered the subsequent proceedings against them untenable.
Key Evidence and Findings: The Court highlighted the Settlement Commission's order, which explicitly allowed further action against other noticees.
Application of Law to Facts: The Court acknowledged the legal provision for continued proceedings but emphasized that such proceedings must be timely.
Treatment of Competing Arguments: The Petitioners argued that the settlement should absolve them, but the Court focused on the delay rather than the settlement itself.
Conclusions: The Court found that while proceedings could continue against other noticees, the delay invalidated such actions.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: The Court stated, "Matters which have the potential of casting financial liabilities or penal consequences cannot be kept pending for years and decades together."
Core Principles Established: Authorities must adjudicate matters with due expedition, and delays without valid justification render proceedings unsustainable.
Final Determinations on Each Issue: The Court set aside the Order-in-Original dated 30th March, 2024, due to the unjustified delay in proceedings, and quashed the proceedings against the Petitioners.