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TMI Blog2023 (2) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... orities, which are admittedly beyond the period of three years. Since the impugned show-cause notices are quashed by this Court, the consequent action of the respondent authorities qua those show-cause notices are also quashed. Petition allowed. - HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI And HONOURABLE MR. JUSTICE SANDEEP N. BHATT MR HARSHADRAY A DAVE, ADVOCATE FOR THE PETITIONERS MR NIKUNT K RAVAL, SENIOR STANDING COUNSEL ASSISTED BY MR KARAN SANGHANI, ADVOCATE FOR THE RESPONDENTS - AUTHORITIES Date : 22/02/2023 JUDGMENT ( PER : HONOURABLE MR. JUSTICE SANDEEP N. BHATT ) 1. The petitioners are before this Court seeking to mainly challenge the show-cause notice issued by the respondent Authority after a period of about more than six/ten years, which are not permissible as per the settled legal position. 2. Since common issue is involved in all these four petitions being Special Civil Applications Nos.7165, 8600, 8685 and 10699 of 2021, with consent of learned advocates for the respective parties, all the matters are heard together and are decided by this common Judgment. 3. The brief facts of the all these matters are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various grounds including the ground that the Show Cause Notice under Rule 16 cannot be issued beyond a period of 3 years being reasonable period of limitation since no limitation is provided for under the Act or the Rules. 3.3 Special Civil Application Number 8685 of 2021 : 3.3.1 The petitioners of this petition are engaged in business of export of fully threaded rods, pickaxe, hoe, Nuts, bolt, washer, hand tools etc. falling under the Chapter Heading 7318, 8205, 3926 of Customs Tariff Act, 1975. The Petitioners are mainly exporting the goods to Saudi Arabia, UAE, Kuwait, Jordan etc. 3.3.2 The petitioners had exported various goods through various shipping bills during the period from 2014 to 2015. Such shipping bills were assessed finally by the proper officer and the said assessment had attained finality. Accordingly, the benefit of Duty Drawback pursuant to such assessment was given to the petitioners. 3.3.3 Respondent No.2 vide notice dated 05.05.2021 sought recovery of excess of the duty drawback so paid during the aforesaid period under the provisions of Rule 16 of Duty Drawback Rules, 1995. It was therefore this petition was preferred challenging such notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice for assessment / export period which is beyond three years. He has submitted that in the present case, the respondent authority has issued the show-cause notices after a period of six / ten years to the petitioners for the assessment / export period, which is not permissible under the law. He has submitted this these petitions may be allowed. 7. Learned senior standing counsel Mr. Nikunt Raval for the respondent Authorities has vehemently opposed these petitions. However, he has fairly submitted that the issue involved in this group of petitions is squarely covered by the decision of this Court rendered in M/s. S J S International (supra). He has submitted that appropriate order may be passed. 8. Except the main issue, as noted above, there are other contentions and grievances raised by the learned advocate for the petitioners in this group of petitions, but since there is no dispute with regard to the proposition laid down by this Court in case of M/s. S J S International (supra), which is accepted by the other side, learned advocate for the petitioners, under instructions, does not press other contentions at this stage, keeping his right open qua those contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is placed on the decision of the Madras High Court rendered in case of K.P. ABDUL MAJEED VS. COLLECTOR OF CUSTOMS CENTRAL EXCISE, COCHIN [1995 (80) E.L.T. 35 (MADRAS)] wherein it is held that if a cause of action has arisen in the territorial jurisdiction of the Commissionerate, the jurisdictional Commissioner can investigate and adjudicate the matter. 7.1 So far as the Rule 16 of the Drawback Rules is concerned, it provides the recovery of payment of drawback and it also permits the initiation of recovery proceedings under Section 142 of the Act. 7.2 Here, the challenge essentially is of having initiated the proceedings in relation to the goods, which have already been exported and there were serious questions raised of misdeclaration in terms of quality, value and wrong classification. This confiscation has been made in terms of Sections 113 (1) and Section 113(2) of the Act read with Section 11 of the Foreign Trade (Development and Regulation) Act, 1962. 7.3 Under the shipping bills No.6982039 dated 01.01.2015 and 6982047 dated 01.01.2015, some of the goods were allegedly misdeclared in terms of quantity/ weight and the classification of the goods. The se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2004 and allied matters needed to consider the very issue where the petitioners before the Court had challenged the order passed by the Revisional Authority which had held that the drawback paid erroneously to the petitioners was liable to be recovered. After a period of more than three years since the disbursement of the Drawback, SCNs came to be issued to each of the petitioners proposing to recover from them the differential amount of drawback erroneously paid to them under section 142 of the Customs Act read with Rule 16 of the Drawback Rules on the ground that the drawback should have been paid at the rate of 17% by taking into account the maximum limit of Rs.62 per kg. The adjudicating authority had held that it was inherent in the scheme that the drawback could not exceed the maximum of Rs.62 per kg fixed for a particular serial number. 9. However, on limitation, it was held that there is no provision prescribing any specific time for issuance of SCN for recovery of excess drawback paid by the Department under Rule 16 of the Drawback Rules. 9.1 This was carried in appeal before the Commissioner (Appeals), who by a common order dated 29.6.2000, allowed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 19th August 1999, that the show cause notices have been issued in February 2000. Thus, though the Customs Authorities were well aware about the clarification in respect of the drawback paid on goods falling under condition (c) of the Note below sub-serial No.5404 (1) of the Schedule, no action was taken at the relevant time to recover the drawback paid to the petitioner beyond the ceiling limit provided thereunder. It is only in February 2000, after a period of more than three years that by issuance of show cause notices, differential amount of drawback was sought to be recovered from the petitioners. The revisional authority in the earlier order dated 28th June, 2002 has held that the Drawback Rules do not provide for any time limit and as such there is no time limit for issue of demand notice for recovery of drawback paid erroneously or in excess under rule 16 of the Rules. 18. Rule 16 of the Drawback Rules provides that where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs, repay the amount so paid erroneousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be laid down in this regard as the determination of the question will depend upon the facts of each case. 20. In Collector of Central Excise, Jaipur v. M/s.Raghuvar (India) Ltd. (supra), the Supreme Court held that any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for the courts to import any specific period of limitation by implication, where there is really none, though courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period. 21. In Torrent Laboratories Pvt. Ltd v. Union of India (supra), a Division Bench of this Court in the context of rule 57-I of the Central Excise Rules, 1944 held that in absence of any provision with regard to specific period of limitation, reasonable period of limitation has to be read into the rule. 22. Thus, it is a settled legal proposition that where a statutory provision does not prescribe any period of limitation for exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the respondents is concerned, a perusal of the said decision indicates that the said case fell within the ambit of willful misstatement or suppression of fact as envisaged under the proviso to section 28 of the Customs Act. It is, therefore, in the light of the peculiar facts of the said case that the court had held that the contention that the extended period of limitation could not be invoked was misconceived. The decision cannot be said to be laying down any absolute proposition of law to the effect that since rule 16 of the Drawback Rules does not provide for any limitation for recovery of amount of drawback erroneously paid, such powers can be exercised at any point of time, even beyond a reasonable period. 25. As regards the submission advanced by the learned counsel for the respondent that since in the review application, the petitioners had not raised the contention as regards limitation, the petitioners are now prohibited from raising the same in these petitions, it may be noted that in the earlier order dated 28 th June 2002, passed by the Government of India, the issue on merits, namely, applicability or otherwise of the maximum ceiling to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs UNION OF INDIA 2 in Special Civil Application No.17812 of 2003. 9.4 It is apt to note that these are binding precedents from 2012. The authority concerned ought to have followed the same when the same have attained finality. 9.5 In Special Civil Application No.14917 of 2013 to 14921 of 2013 this Court (Coram: Justice M.R.Shah, as His Lordship then was Justice Sonia Gokani) in case of E I DUPONT INDIA PRIVATE LIMITED 1 vs UNION OF INDIA 3. had noticed the case of Commissioner of Central Excise and Customs vs. NBM Industries, reported in 2013(29) STR (208) Gujarat wherein it had been held that on inputs used in manufacturing of goods cleared by DTA units to 100% Export Oriented Unit (EOU), refund of CENVAT credit is available and the same cannot be denied on the ground that the case was of deemed export. It was insisted that the refund would be granted only in case of physical export. This Court disapproved non following of a binding decision and despite the direction of this Court, the respondent had rejected the refund claims of the claimant on the ground that the decision of NBM Industries (supra) is the case of another assessee and not in the case of claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves to be quashed and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allowed. Both the show cause notices dated 21.8.2012 and 22.1.2013 are quashed and struck down. It appears that still the message has not reached the concerned authorities in following the binding decisions of the higher appellate authorities and/or courts solely on the ground that the same is in the case of another assessee. Such a conduct is also required to be viewed from another angle. This would not only amount to disregarding the direction of the court rendered in earlier petitions but would also lead to multiplicity of proceedings. When the courts are overburdened and are accused of arrears, it is the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack as the shipping bills were filed through EDI system. Under the EDI system, once the final shipping bill is generated, the same becomes the final claim for the duty drawback according to the petitioner and the same needs to be paid within three working days as per the Circular No.25 of 2000 of the department. 16. As held above in case of those shipping bills as the show cause notice essentially cannot be issued beyond the period of three years of payment of the duty drawback, and that being a settled legal position, if not regarded, this Court needs to interfere. Again, the proper officer who assesses the shipping bills will be in a position to reopen the same provided that there is such a stage of reopening the shipping bill filed once are self assessed, that would attain finality upon the proper officer clearing the same. Had there been any discrepancy, the proper officer would not consider the self assessment final and would obviously assess the shipping bill before finalizing. 20. Resultantly, this petition is allowed partly. The action of the respondent authority of issuance of the SCN dated 09.02.2018 is interfered with. The SCN in the present form is quashed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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