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TMI Blog1985 (12) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 24-10-1975 of the Ministry of Commerce, the Government passed another ad hoc exemption order dated 11-11-1975, whereunder full exemption was granted with reference to 1,20,354 bales consisting of 66,701 bales already cleared as well as 53,653 bales which had been imported but for which duty had not been paid, as the said goods had been stored in the Bonded Warehouse. 2. With reference to the quantity for which duty had already been paid at 15%, the Collector of Customs Ahmedabad, under orders dated 22-12-1976 and 29-1-77, held that the assessment in respect thereof had been made erroneously in view of the order dated 11-11-1975. He consequently ordered refund of the duty already collected. It is admitted that duty so ordered to be refunded had in fact been refunded in about March or April 1977, the refunds having been received by the various Mills who are respondents to this batch of appeals, i.e. respondents except the Cotton Corporation of India. 3. Subsequently, the Government of India issued a show cause notice dated 8-10-1982 under Section 131 (3) of the Customs Act, 1962. It was mentioned therein that the Central Government was tentatively of the view that ad hoc exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the basis of these notings that the argument as above mentioned has been built up for the respondents. The argument is that though the notice may have been prepared, and also signed, on 8-10-1982 (the date found beneath the signature), the decision to issue the same was taken on 11-10-1982 only, as indicated by noting No.(1) above mentioned and therefore there had been no validly initiated proceedings as on the end of the date 10-10-1982. It is, therefore, contended that as on 11-10-1982 there was no validly initiated proceeding pending before the Central Government as would require transfer thereof to this Tribunal under Section 131 B of the Act. It is further pointed out that the further notings would establish that even on 11-10-1982 notice had not been issued and therefore a further decision was taken on 12-10-1982 for issue and hence the proceeding can be said to have been validly initiated only on 12-10-1982, when the notice was actually issued. The contention for the department in this connection is that the initiation of proceedings was on 8-10-1982, when the Secretary had signed the office copy of the notice. It is pointed out that not merely had he signed the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed that day and could not be carried out in the next two days as they happened to be holidays and so when the question of actual despatch on 11-10-1982 arose there was evidently a hesitation as to whether it may be issued on that date (as it was the appointed date under the Act) and therefore, the Secretary had to be consulted who directed the issue. The Secretary had evidently given the direction as he himself was satisfied that the proceeding having been validly initiated on 8-10-1982, there was no bar on despatch of the same on 11-10-1982. No doubt this is all merely by way of speculation. But, as earlier mentioned, in the absence of evidence as to a conscious decision to postpone the issue of the notice even after signature thereof, the only conclusion to be drawn would be that the signature in the notice was made in pursuance of the decision taken for issue thereof and therefore the initiation of proceedings thereon was on the date the notice was signed. Accordingly, we are not impressed with the objection on the part of the respondents that there was no validly initiated proceedings pending on 10-10-1982 as would have required transfer under Section 131 B of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as notice was issued on 2-8-1966 and reply was sent on 9-8-1966 but yet no further action was taken till January 1977, the proceedings ought not to be allowed to be continued. In the present case it should be noted that even in 1978 proceedings were commenced under Section 28 but, evidently realising the validity of plea regarding bar of limitation as had been raised by the several of the respondents, that line of action had been dropped and resort had been taken to the provisions of Section 131 (3) of the Act. The period taken cannot be said to be unduly long or not properly explained. Further, while the High Court may have power to strike down proceedings on the ground of laches on the part of the Department, we do not think that the Tribunal would have any such power on that ground. We, therefore, hold that the proceedings initiated under the show cause notice dated 8-10-1982 cannot be said to be affected by bar of limitation or liable for being struck down on the ground of laches. 10. The background leading to the issue of the show cause notice had been already indicated. The show cause notice proceeded on the basis that the ad-hoc exemption order No. 442 dated 11-11-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that considerations of retroactivity are not relevant for an order under Section 25(2). For the same reasons, we are unable to agree with the contention of Shri Ohri that the order dated 11-11-1975 would have to be held to be had on the basis that it was retroactive in character and that in law it cannot have such an effect. 11. It may be seen that the order dated 11-11-1975 came to be issued in pursuance of a letter dated 24-10-1975 from the Deputy Secretary in the Ministry of Commerce. The said letter reads as follows : Most Immediate J.L. BajajD.O. No. 12(10)/74-TE (II) Dy. Secretary. Ministry of Commerce, New Delhi, the 24th October, 1975. Dear Shri Mandal, Kindly refer to your D.No. 355/106/74-Cus.I, dated the 21st October, 1975, regarding the exemption of Import duty on Pakistani Cotton. A total of 1,20,354 bales of Pakistani Cotton have been imported of which 66,701 bales imported by the Cotton Corporation of India on Government Account were cleared on payment of 15% import duty and are stored at Bombay. Of these 27,809 bales are of BSI variety and 38,892 are of AC-134 variety. An additional quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that paragraph 2 of the said order referred to the quantity of cotton in question as imported at various ports . There can, therefore, be no doubt that the order dated 11-11-1975 had been issued with reference to the 66,701 bales already imported and for which duty had been paid (the refund of which is in question in the present proceedings). There can, therefore, be no doubt that the Government, in exercise of its powers under Section 25(2), had thought it fit to issue an order for exemption from duty with reference to the quantity alr eady imported and cleared on payment of duty and also the quantity landed but not yet cleared. In the circumstances, the reliance by Shri Ohri on the words when imported into India in paragraph 1 of the order dated 11-11-1975, to build an argument that the order related to the quantity to be cleared thereafter only, cannot be accepted. 13. Shri Gagrat in this connection relied upon a decision of this Tribunal in Food Corporation of India v. Collector of Customs, Bombay [1985 (21.) E.L.T. 128]. It had been held in that decision (following a decision of the Madras High Court in Indian Leaf Tobacco Development Company Limited v. Union of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is exactly the same with reference to all the respondents and the facts as well as the legal considerations are exactly the same in all the appeals. In these circumstances, we are satisfied that the show cause notice will have to be set aside in respect of all the respondents. 17. Accordingly, all these appeals are dismissed and the show cause notice dated 8-10-1982 is discharged. 18. [per : Shri. G. Shankaran for himself and Shri K.L. Rekhi.]. - I have perused the order proposed by my learned brother Shri Raghavachari. While I agree with the conclusion that the show-cause notice dated 8-10-1982 issued by the Central Government under Section 131(3) of the Customs act should be discharged and accordingly all these appeals should be dismissed, by reasoning for doing so is different. 19. With regret, I am unable to agree with the finding in para 7 of the Order holding that these proceedings were validly initiated proceedings pending before the Central Government immediately before the appointed day . Section 131(3) of the Customs Act as it stood at the material time provided that The Central Government may of its own motion annul or modify any order passed under Section 128 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-sections (4) and (5), the notice under Section 131(3) must be given within the limitation specified in the said sub-sections. It would not mean that no notice was required under Section 131(3) if none of the situations, envisaged in sub-sec. (4) and (5) was involved. In this connection, one may profitably refer to the observations of the Supreme Court in its judgment in Geep Flash Light Industries Ltd. v. Union of India Others 1983-E.L.T.-1596 (S.C.) (para 22) to the effect that the power of the Central Government to suo-motu annul or modify any order passed under Section 128 or Section 130, in exercise of its power under Section 131(3), is to be exercised on giving notice to the person concerned. 20. On the basis that giving a notice under Section 131(3) was a must for valid initiation of proceedings under that sub-section, we have now to see whether the Customs Act prescribes the manner of service of notice. Section 153 of the Act provides inter alia that a notice issued under the Act shall be served by tendering the notice or sending it by Registered Post to the person for whom it is intended or to his agent or if the notice cannot be served in the aforesaid manner, by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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