9911796707
TMI Blog2024 (1) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment to defer the determination of the notices for an indeterminate period of time. The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer. The passing of the impugned Order-in-Original while the impugned SCN was under challenge before this Court would amount to initiation of parallel proceedings rendering the scrutiny of the Court as infructuous. A similar situation has been dealt by the High Court of Bombay in Parle International Ltd. v. Union of India [ 2020 (11) TMI 842 - BOMBAY HIGH COURT] , wherein the SCN was not adjudicated for over 13 years and after the same was assailed before the High Court, the concerned authority passed the order-in-original. Conclusion - The impugned SCN and the Order-in-Original due to the delay in adjudication and violation of natural justice principles. Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of import of 'Newsprint & Light Weight Coated Paper' (hereinafter "LWC"), by diverting the said goods to the local market instead of using the same for printing of newspapers & magazines. Accordingly, on 28th December, 2005, the DRI conducted certain searches at the premises of Mr. Prakash Garg, his firms, including the Petitioners. It is alleged by the Petitioners that during the investigation, the Petitioner No. 2 was forced to submit a Bank Guarantee of Rs. 6,16,941/- towards provisional release of consignment. 5. Thereafter, the impugned SCN was issued by the DRI, upon completion of its investigation, holding the Petitioners, inter alia, jointly and severally liable for payment of differential duty under Section 28 (1) of the Act. The allegations against the Petitioners in the impugned SCN qua one of the consignments which is alleged to have been undervalued by the Petitioners, are reproduced hereinunder: "53.1 From the investigation conducted, it transpires that Prakash Garg in his firm M/s Vijay Enterprises and M/s Salwan International Paper Pvt. Ltd had fraudulently imported 115 and 05 consignments of paper respectively. 53.2 Prakash Garg was the master mind behind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination of duty needs to be enhanced to Rs. 8431668/-, as shown in Table A-1 under Section 14 of the Act & Rule 4 & 6 of the Rules ibid as discussed in the Paras above. 53.3.5 They have knowingly and fraudulently evaded Customs duty on 22 no. of consignments imported amounting to Rs. 11,30,728/- as shown in Table A-1 by suppression and mis-declaration in value, and therefore such amount along with interest becomes payable under Section 28 (1) proviso and 28 AB of the Customs Act, 1962, respectively. As the said have been evaded by taking recourse to willful mis-statement and suppression of fact, they are also liable for penalty under Section 114 A of the Act ibid." 6. On the basis of the allegations stated in the impugned SCN, the DRI had raised the following demands against the persons and firms, including against the Petitioners, alleged to be involved in undervaluation in the import of the subject goods: "55. Now, therefore, Salwan International Paper Pvt. Ltd, its Director Ashish Garg & Vijay Garg and its controller Prakash Garg are hereby called upon to show cause to the Commissioner of Customs, ICD, TKD, New Delhi within 30 days from the date of receipt of this show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is alleged that between October, 2014 to April, 2017 no proceedings were conducted in respect of the impugned SCN. Finally, vide letter dated 22nd May, 2017, the concerned assessing officer fixed the date for personal hearing on 2nd June, 2017 on which date the Petitioners are stated to have submitted another letter requesting to provide all RUDs and other documents. 8. It is the case of the Petitioners that that after 22nd May, 2017, there has been no progress in the proceedings under the impugned SCN. Since, the impugned SCN was not adjudicated for about 15 years since its issuance, the Petitioners filed W.P.(C) 15436/2023 seeking quashing of the same. 9. During the pendency of the said writ petition the concerned assessing officer had passed the impugned Order-in-Original dated 31st January 2024, inter alia ordering the confiscation of the imported goods and imposing interest and penalty upon the Petitioners. The operative portion of the impugned Order-in-Original is as under: "13. In view of above discussion and findings, Pass the following order: ORDER I. In case of Mis Vijay Enterprises (i) I reject the declared assessable value of Rs. 3,08,02,847/- for 3308.186 MTS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Bills of Entry as detailed in Annexure of Show Cause Notice and re-determine the same as Rs. 1,26,62,638/- as discussed in para 9 supra; (ii) I order for confiscation of goods having re- determined value of Rs. 1,26,62,638/- under Section 111 (m) of the Customs Act, 1962. Since the goods are not available for confiscation, no redemption fine is imposed; (iii) I determine the short-paid customs duty Rs. 12,55,417/- (Rupees Twelve lakh Fifty Thousand Four Hundred and Seventeen) in respect of imported goods under section 28 (2) of Customs Act and order recovery under proviso to Section 28 (1) of the Customs Act, 1962 along with applicable interest under Section 28AB of the Customs Act, 1962 as discussed at para 10 supra; (iv) I impose penalty of Rs. 1,00,000/- (Rs one lac) Under Section 112 (a) (ii) and Rs. 12,55,417/- (Rupees Twelve lakh Fifty Thousand Four Hundred and Seventeen) under Section 114A of the Customs Act, 1962 on M/s Salwan International Papers Pvt. Ltd; (v) I order to appropriate of Bank Guarantee of Rs. 6,16,941/- submitted by M/s Salwan International Papers Pvt. Ltd for provisional release during investigation as discussed at para 10 and order to adjust towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectively. It is also argued by the DRI that the Petitioners have an alternate efficacious remedy and thus the present writ petition is not maintainable. 12. The case of the Petitioner however is that under Section 28 (9) of the Act there is a specific time-period fixed for the purpose of adjudication of show-cause notices and determination of amount of duty or interest. The period specified in the said provision is six months and a maximum period of one year. Section 28 (9) of the Act reads as under: Section 28 (9) of the Customs Act, as in force prior to 29th March 2018 read as under: "28. Recovery of [duties not levied or not paid or short-levied or short-paid] or erroneously refunded. xxx xxxx xxxx xxxx (9) The proper officer shall determine the amount of duty or interest under sub-section (8),-- (a) within six months from the date of notice, [where it is possible to do so], in respect of case falling under clause (a) of sub-section (1); (b) within one year from the date of notice, [where it is possible to do so] in respect of cases falling under sub-section (4):" Section 28 (9) and 9(A) of the Customs Act, 1962 pursuant to amendment reads as under: "28. Recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpreted including the decision in Swatch Group India Pvt. Ltd. v. Union of India & Ors. 2023 SCC OnLine Del 4938, and Gala International Pvt. Ltd. v. Additional Director General, Directorate of Revenue Intelligence, Delhi and Ors, 2023 SCC OnLine Del 6073. 14. Ld. Counsel for the Petitioner submits that this phrase - "where it is possible to do so" has been omitted after the amendment and post the omission, the window which existed for delay in adjudication after the issuance of show cause notice does not exist. 15. Ld. Counsel for the Petitioner has also relied upon the following judgments: i. State of Punjab & Ors. v. Shreyans Industries Ltd., (2016) SCC769 ii. Shri Ram Agro Chemicals Pvt. Ltd. v. Union of India & Ors., 2019 SCC OnLine P&H 4918 Analysis and Findings 16. Heard. 17. The Court has considered the matter. The issue raised in the petition is no longer res-integra. Section 28 (9) of the Act, unamended and amended, have been considered in detail by the Coordinate Benches of this Court in Swatch Group India Pvt. Ltd. (supra) as also M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General & Anr., 2024 SCC OnLine Del 8756. All the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur view, there is no material to show that it was not possible for the proper Officer to determine the amount of duty within the prescribed period. The mention of the words, "where it is not possible to do so", in our opinion, does not enable the Department to defer the determination of the notices for an indeterminate period of time. The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer. 47. In the absence of any ground that it was not possible for the officer to determine the amount of duty within the prescribed period, the impugned SCN has lapsed and cannot be adjudicated." M/s Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr., 2024 SCC OnLine Del 8756 "85. The position which thus emerges from the aforesaid discussion and a review of the legal precedents is that the respondents are bound and obliged in law to endeavour to conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Original while the impugned SCN was under challenge before this Court would amount to initiation of parallel proceedings rendering the scrutiny of the Court as infructuous. A similar situation has been dealt by the High Court of Bombay in Parle International Ltd. v. Union of India, 2020 SCC OnLine Bom 8678, wherein the SCN was not adjudicated for over 13 years and after the same was assailed before the High Court, the concerned authority passed the order-in-original. The High Court quashed both the impugned SCN therein and the consequential proceedings resulting in the order-in-original. The relevant paragraphs of the said judgement of the Bombay High Court are reproduced under: "24. There is one more aspect which we would like to point out. The respondents had not taken any action pursuant to the show-cause notices for long 13 years till issuance of notice for personal hearing on August 13, 2019. After the petitioner approached this court by filing the present writ petition on September 6, 2019 with due intimation to the respondents, respondent No. 3 went ahead and passed the order-in-original dated November 11, 2019. We fail to understand when the respondents could wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken that such an order should be ignored as it is contumacious." 26. The above aspect also requires a serious consideration and, therefore, has been re-stated. When a matter is brought before the court or the court is examining the matter, respondents cannot initiate or proceed with a parallel proceeding on its own to render the court scrutiny redundant. Such an approach is neither acceptable nor permissible. 27. In any view of the matter when the commencement of adjudication proceedings after inordinate delay of 13 years post-issuance of show-cause notices and submission of reply is held to be untenable in law, any consequential decision or order based on such delayed adjudication would also be rendered invalid." 20. The above-observations have been referred to by the Co-ordinate Bench of this Court in Vos Technologies (supra), wherein further to the SCN, the order-in-original was also passed in certain writ petitions. Despite this, the Court held that the SCN as also the final order that came to be passed in the corresponding proceedings would be liable to be quashed due to the delay in adjudication of the impugned SCN therein. 21. Considering the aforesaid discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
