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TMI Blog2025 (4) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents. 3. By these petitions under Article 226 of the Constitution of India, the petitioners have challenged the show cause notices issued by respondent no. 2 Joint Commissioner, Customs, Mundra, Kutch. The show cause notices were issued in the year 2016. 4. The petitioner is engaged in the business of export of nut, bolts, washer, hand tools etc. falling under Chapter Heading 7318, 8205, 3926 of the Customs Tariff Act, 1975. The petitioner is exporting the said goods to Dubai, UAE. 5. Respondent no. 2 based upon the intelligence seized the containers of the petitioner along with other exporters on 20.01.2015 on the ground that the goods are under weighing and are not properly classified. According to respondent no. 2, the goods were required to be classified under Chapter Heading 7308 and not under Chapter heading 7318 and therefore, the same was considered as mis-declared goods. 6. The petitioners preferred Special Civil Application No.7305 of 2015 challenging the condition imposed by respondent no. 2 for provisional release of the seized goods which was modified by this Court requiring the petitioner to give bond for value of the goods for provisional release. 7. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Taxation Officer cum Assession Authority reported in (2023) 384 ELT 8 (SC) 12. It was further submitted that the shipping bills in question were finally assessed, and the petitioners were granted the benefit of duty drawback and the goods in question have already been exported out of India and have reached their respective destination. It was further pointed out that duty drawback for the entire period from 1st January 2011 to 30th September, 2016 was already paid to the petitioners and Bank Realisation Certificates have been issued upon realization of the consideration in foreign exchange declared in the shipping bills. It was also pointed out that no appeal challenging the final assessment of the shipping bills is preferred by the respondents and appeal period has already lapsed. 13. It was submitted that the impugned show cause notices are liable to be quashed as the same are not adjudicated upon by the authority from 2016 till 2023, more particularly, when the impugned notices are for goods exported by the petitioners from 01.01.2011 to 30.09.2016 and therefore, show cause notices in some cases is composite show cause notice of six years. It was therefore, submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during which the show cause notice can be issued by the authority, however, in similar issue, this Court in case of Pratibha Syntex Limited v. Union of India and others (judgment dated 04.07.2022 rendered in Special Civil Application No. 2039 of 2004) has held that the period for issuance of show cause notice under Rule 16 would be three years from the date of duty drawback being paid. It was therefore, submitted that the impugned show cause notices and subsequent proceedings initiated by respondent no. 2 are beyond the period of limitation prescribed by this Court. The decision of this Court was followed in various other decisions and the SLP filed against such decision including the review petition preferred by the respondents have been rejected by Hon'ble Supreme Court. 17. Learned advocate Mr. Dave further submitted that as per section 128 of the Customs Act, any person including the department if aggrieved by the final assessment must file an appeal before the stipulated time frame and if no appeal is filed, assessment would attain finality and cannot be reopened. It was submitted that shipping bills relating to the period covered by the impugned show cause notices are alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , revisional authority and this Court wherein it is already held that classification of such goods sought to be exported by the petitioner and other exporters would be item specific and not as per end use and classification made by the exporters in Chapter Heading No.7318 was held to be proper. It was submitted that despite such binding decisions, the respondents have continued to issue the show cause notices to reopen the assessment on the ground of classification and as such, the show cause notices are without jurisdiction. Reliance was placed on the following decisions: 1) M/s. S.J.S International (Special Civil Application No. 20484 of 2019). 2) Gargip International v. Union of India (Special Civil Application No. 17255 of 2016). 3) Vinod Electropating Works(order dated 19th November, 2015 of Appellate Commissioner). 4) Vinod Electropating Works, (order dated 1st /3rd February, 2022 of revisional authority). 5) Hind Steels, Additional Commissioner (Export) order dated 20.03.2014. 6) Vinod Electroplating Works, Additional Commissioner (Export) Order dated 20.03.2014. 22. With regard to the allegation of over valuation of the goods exported by the petitioners leveled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the petitioner and during the investigation the goods were seized on reasonable belief that the same were liable for confiscation. It was submitted that merely because the goods were provisionally released, it cannot be said that show cause notices cannot be issued if during the investigation it is revealed that there is short shipment, mis-classification and over valuation of exported goods. It was therefore, submitted that the impugned show cause notices are issued for recovery of fraudulently availed excess duty drawback by the petitioners under Rule 16 of the Drawback Rules read with section 75 of the Customs Act. It was submitted that though relied upon documents and evidence have been provided to the petitioners to represent their case before the adjudicating authority, the petitioners have not complied with the impugned show cause notices. 27. It was submitted that as per Circular No. 24/2011 dated 31.05.2011 issued by the Central Board of Excise and Customs at the relevant time, Proper Officer can issue the show cause notice in cases involving collusion, willful misstatement or suppression of facts without any time limit and therefore, the impugned show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer of DRI. 31. It was therefore, submitted that the issues raised by the petitioners can also be considered by the adjudicating authority during adjudication process. 32. In support of his submission, reliance was placed on the decision of Calcutta High Court in case of M M Exports v. Zonal Director General of Foreign Trade reported in 2001 (133) ELT 558 (Cal.) wherein it is held that officer of the Customs Department is competent authority for assessment and reassessment of the value of goods. It was therefore, prayed that no interference may be made in these petitions and respondent no. 2 may be permitted to adjudicate the show cause notices in accordance with law. It was further submitted that reliance placed by the petitioners on various decisions are based upon the facts which are different and present case cannot be compared with other consignments not covered by investigation by DRI as show cause notices in the present case have been issued after following findings of the investigation. It was therefore, submitted that no period of limitation would apply in view of Rule 16 of the Drawback Rules and the petitioners may be subjected to the adjudication process before res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners as respondent no. 2 has no jurisdiction to issue the show cause notices in the facts of the case, more particularly, when such show cause notices are time barred and respondent no. 2 has failed to take into consideration the binding precedent. 35. This Court in case of M/s. SJS International (supra) in similar facts after considering similar contentions raised by the petitioners and the respondents in the said case, examined Rule 16 of the Drawback Rules as under: "7.4 Apt would be to refer to Rule 16 of the Drawback Rules, at this stage, which speaks of repayment of erroneous or excess payment of drawback and interest. "Rule 16. Repayment of erroneous or excess payment of drawback and interest. - 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 erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962." 7.5 It is quite clear from the said Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 claimant and each one must fight its own battle and must succeed or fail in such proceedings. It also had relied on the decision of the Madras High Court reported in 2007 (211) ELT 23 (Madras) which was against the assessee. 9.6 This Court taking note of various decisions had directed that the action of the rejection of refund claim cannot be sustained and deserve to be quashed and set aside. While parting, the Court in very strong words disapproved the arbitrary act on the part of the lower adjudicating authority and in ignoring the binding precedents. Apt would be to refer to those words: "[6.0] In view of the above and for the reasons stated above and the decision of this Court in the case of NBM Industries (Supra), the impugned orders passed by the respondent No.4 rejecting the refund claims of the petitioner cannot be sustained and they deserve to be quashed and set aside and are accordingly qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 duty of the concerned authorities to avoid multiplicity of proceedings and lessen the burden of the courts. Being a part of the justice delivery system. All efforts should be made by the authorities/quasi judicial authorities and judicial authorities to see that there is no multiplicity of proceedings and to pass the orders considering the binding decisions. It would also avoid unnecessary harassment to the parties as well as the unnecessary expenditure. [6.2] As observed hereinabove despite clear and unequivocal message by the pronouncement of the decisions by the Hon'ble Supreme Court as well as this Court, the message has not reached to the concerned authorities, we direct respondent No. 2 - Central Board Excise and Customs, New Delhi to issue a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCN of dated 12.01.2016 in relation to the seized goods was already issued and yet, another SCN is issued, the revenue has not challenged what has been held favoring the petitioner and the petitioner has challenged it on the ground of breach of principles of natural justice as well as on substantive issues. 13. The petitioner has approached this Court as the actions have been taken of issuance of the SCN in relation to the search made on 10.01.2015, the SCN has been issued on 09.02.2018. It is thus clear that for the export which had been made in the years 2011 to 2015 and for the shipping Bills of 01.01.2015 for which the duty drawback had been given to the petitioner in the year 2016, this action has been initiated before expiry of a period of three years so far as some bills are concerned. As held by this Court in case of PRATIBHA SYNTEX LIMITED vs. UNION OF INDIA & OTHERS, Rule 16 of the Drawback Rules though does not provide for the period of limitation, the reasonable period of limitation has to be read into the same and the SCN issued before expiry of a period of three years from the date of payment of the drawback to the petitioner cannot provide a reason for the Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r officer would not consider the self assessment final and would obviously assess the shipping bill before finalizing. 17. In the instant case, the shipping bills had been finally assessed and the assessment had attained finality. The aggrieved party having any issue on the classification would need to approach the appellate authority instead of reopening the assessment by issuing the show cause notice. The appeal appears to have become time barred as averred by the petitioners, the show cause notice is on account of the misclassification. 18. However, the Court needs to regard that the core issue raised in SCN is of classification which is concluded, and no challenge is made by the revenue. It has also questioned this after the export is already made and, even when the statutory provision permits the same, settled legal position would preclude such challenge when made beyond a specific time period. Additional reason is of the time stipulated for clearing the shipping bill which is of three days (3) and any late clearance also cannot furnish the reason to permit issuance of the SCN calculating from the date of payment of duty drawback. Even if, this angle is not dilated and lef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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