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TMI Blog2013 (1) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notices be said to have been issued within a reasonable time. Under the circumstances, the show cause notices have to be held to be bad on the ground of being time-barred. In favour of assessee - 17812 of 2003 - - - Dated:- 4-7-2012 - Akil Kureshi and Harsha Devani, JJ. REPRESENTED BY : Shri Paresh M. Dave, for the Petitioner. Shri R.J. Oza, for the Respondent. Judgment per : Harsha Devani, J. (Oral)]. - By this petition under Article 226 of the Constitution of India, the petitioners have challenged the Order-in-Appeal No. 285/2003 (102-AHD)Cus/Comm(A)/AHD, dated 22-9-2003 passed by the Commissioner of Customs (Appeals), Ahmedabad, whereby the appeal preferred by the petitioners has been dismissed for non-compliance with the provisions of Section 129E of the Customs Act, 1962. 2. The petitioner firm is engaged in various business activities including export of fabrics made from 100% polyester filament yarn. The Central Government in exercise of powers conferred by Section 75 of the Customs Act, 1962 and Section 37 of the Central Excise Act, 1944, has framed the Rules called the Customs Central Excise Duties Drawback Rules, 1995 (hereinafter referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid drawback was recoverable under Section 142 of the Customs Act, 1962 read with Rule 16 of the Drawback Rules. The show cause notices culminated into an Order-in-Original dated 5-7-2000 demanding alleged excess amount of drawback erroneously paid to the petitioners. Being aggrieved, the petitioners preferred an appeal and stay application before the Commissioner (Appeals), Ahmedabad. It appears that in the meanwhile, the Commissioner (Appeals) had heard and decided eight similar appeals vide order dated 28-6-2000 allowing the appeals of similar exporters and holding that there was nothing wrong in allowing drawback as per rates claimed by the exporters and demands were also time-barred. Against the said order, the Commissioner of Customs, Gujarat had preferred revision applications before the Joint Secretary, Government of India who vide Final Order Nos. 198-205/2002, dated 28-6-2002, had allowed the revision applications filed by the Department. The said common order came to be challenged before this Court by way of writ petitions being Special Civil Application No. 12084 of 2002 and other cognate matters. By a judgment and order dated 31-1-2003, the petitions were disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that arises for consideration in this group of petitions is as to whether the concept of reasonable period is required to be read into rule 16 of the Drawback Rules which does not prescribed any period of limitation for recovery of drawback erroneously paid. 17. As noticed earlier, the drawback claims in all these petitions relate to the period between December 1995 to 1996, in relation to which, show cause notices came to be issued in February 2000. Thus, in all the cases, drawback claims had been processed and cleared before issuance of the clarification vide letter dated 20th September 1996 by the Commissioner (Drawback) with the approval of the Chairman of C.B.E. C. On a close reading of the said letter, it is apparent that the same envisages finalization of pending drawback claims in the light of the clarification issued therein, namely, that the maximum ceiling has to be inferred even in cases where goods are not exported under AR-4 and/or exporter is unable to furnish the certificate as required under condition (b) of the Note to SS No. 5404 (1) in respect of which drawback is payable at the rate of 17% of the FOB value. Thus, while issuing the initial clarification on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable time. What would be a reasonable period would, of course, depend upon the facts of each case. 19. In Government of India v. Citedal Fine Pharmaceuticals, Madras (supra), the Supreme Court has, in the context of rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956, which did not provide for any period of limitation, held thus : 6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them. Judging the period of delay from the armchair of a reasonable man, under no circumstances can the period of more than three years be termed to be a reasonable period for recovery of the amount erroneously paid. As held by the Supreme Court in the case of Collector of Central Excise, Jaipur v. M/s. Raghuvar (India) Ltd. (supra), where no period of limitation is prescribed, the courts may always hold that any such exercise of powers which has the effect of disturbing the rights of citizen should be exercised within a reasonable period of time. In the present case, the drawback had been paid more than three years prior to the issuance of the show cause notices, and despite the fact that clarification in respect of condition (c) of the Note under SS No. 5404(1)(i) of the Schedule had been issued way back in the year 1996, no efforts were made to recover the drawback paid to the petitioners at the relevant time. Thus, the petitioners were entitled to form a belief that the matter has attained finality and arrange their finances accordingly. Now, when after a period of more than three years has elapsed, if the respondents seek to recover the amount of drawback paid, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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