2024 (10) TMI 1412 - HC - Customs

Show cause notice pending adjudication for the last 15 years - eligible reasons for inordinate and unexplained delay - HELD THAT - In the present case, the delay between 2008 and 2021 is inordinate and, moreover, unexplained. The affidavit filed by the Respondent does not explain this inordinate delay. The Hon ble Supreme Court s order M/S SWATI MENTHOL AND ALLIED CHEMICALS LTD ANR. 2023 (7) TMI 662 - SC ORDER as noticed by the Co-ordinate Bench, does not make out the proposition that gross, unjustifiable and inordinate delay in adjudication of the show cause notice must, in every case, be excused regardless of the absence of any reasonable explanation. Accordingly we quash and set aside the impugned show cause notice and restrain the Respondents from proceeding further based on it.

Summary

Issues:
1. Delay in adjudication of show cause notice dated 16 May 2008 under section 112(a) of the Customs Act, 1962.
2. Transfer of the matter to the call book without intimation to the Petitioner.
3. Applicability of Section 28(9) of the Customs Act.
4. Prejudice to the Petitioner due to the prolonged delay in adjudication.

Detailed Analysis:

Issue 1: The Petition challenged a show cause notice dated 16 May 2008, pending for 15 years, seeking to impose a penalty for alleged clandestine clearance of import assignments without payment of appropriate duty. Despite multiple hearings from 2008 to 2021, no effective hearing took place, leading to an inordinate delay. The Court noted the absence of any reasonable explanation for the delay and relied on previous decisions to quash the notice due to the unexplained and unjustifiable delay.

Issue 2: The Respondents transferred the matter to the call book in 2021 without informing the Petitioner, breaching Section 28(9) of the Customs Act. The Court emphasized that the Respondents were obligated to intimate the party about such transfer, as established in previous judgments, and the lack of communication violated the legal provisions.

Issue 3: The Respondent's reliance on a Supreme Court order allowing the adjudication of the show cause notice was rejected. The Court highlighted that the delay from 2008 to 2021 remained unexplained, and the Supreme Court's order did not excuse gross and unjustifiable delays without reasonable explanations. The Court emphasized that the delay and lack of communication regarding the transfer to the call book prejudiced the Petitioner's ability to contest the notice issued in 2008.

Issue 4: The Court found inherent prejudice to the Petitioner due to the prolonged delay in adjudication. Referring to previous decisions, the Court noted that enforcing demands at this stage would adversely impact the establishment's economics. Therefore, considering the delay, lack of explanation, and prejudice to the Petitioner, the Court quashed the show cause notice dated 16 May 2008 and restrained the Respondents from further proceedings based on it, making the Rule absolute without costs.