Adani Wilmar Ltd vs Union Of India

Rule. Learned advocate Mr. Viral Shah waives service of Rule on behalf on behalf of the respondent No.2.

With the consent of the learned advocates for the parties, the mater is taken up for final disposal.

The petitioners have preferred present petition under Article 226 of the Constitution of India for the following reliefs:

"(a) Your Lordships be pleased to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ or order quashing impugned show cause notice dated 25.9.2002 (Annexure A hereto).

(b) Your Lordships be pleased to restrain the respondents, their servants and agents from taking any further action as regards impugned show cause notice dated 25.09.2002 (Annexure A hereto)"

The background facts leading to filing of this petition as could be gathered from the memo of the petition needs to be set out as under:

4.1 The petitioner No.1 Company is engaged in the activity of manufacturing and selling a wide array of edible oils. On 08.06.2001, the petitioner No.1 Company entered into Sale Contract bearing No.80000056 with Wilmar Trading Pte Ltd., Singapore for supply of 20000 MT (actual quantity imported was 19605.064 MT) Degummed Soyabean Oil @ US$ 310 PMT. Out of total quantity, a quantity of 7605.064 MT was sold on high seas sale basis to various parties. Therefore, the petitioner No.1 Company filed 8 Bills of Entry for clearance of imported goods i.e. 12000 MT for home consumption under Section 46 of the Customs Act, 1962.

4.2 The respondent No.2 based on (i) quotations appearing in Oil World Quotations and (ii) imports made by M/s. Kundan Rice Mills Ltd., Delhi, issued a show cause notice on 25.09.2002 proposing to enhance the value of imported goods @ US$ 425 from US$ 310 as declared by the petitioner No.1 Company.

4.3 The petitioner No.1 wrote a letter on 01.10.2002 to the Deputy Commissioner of Customs, GAPL, Mundra, requesting to provide certain documents, so that petitioner could prepare and submit reply to the said show cause notice. On 21.01.2002, the aforesaid Customs Authority has addressed letter to the petitioner necessary documents.

4.4 Thereafter, the petitioner No.1 filed detailed reply to the show cause notice on 24.12.2002 by submitting with other submissions that the quotations cannot be relied upon for purpose of enhancement of value of goods imported.

4.5 On 11.02.2003, the Assistant Commissioner of Customs, GAPL, Mundra has fixed the hearing of the impugned show cause and thereafter, from time to time, the hearing was fixed. On 12.07.2003, the petitioner No.1 filed detailed reply in addition to earlier reply dated 24.12.2002 to the impugned show cause notice. Even on 12.07.2003, the petitioner No.1 submitted its reply, but the said Authority has not decided the impugned show cause notice due to monetary jurisdiction.

4.6 Thereafter, nothing is heard by the petitioner No.1 pertaining to the impugned show cause notice from the Customs Department even after passage of about 15 to 16 years. Learned advocate placed reliance on the decision of this Court in the case of M/s. Siddhi Vinayak Syntex Pvt. Ltd. Union of India and ors. reported in 2017(352) ELT 455 wherein this Hon'ble Court has quashed and set aside the Show Cause Notice and adjudication orders in the aforesaid cases involving the same dispute of duty on draw winding of yarn because adjudication proceedings were revived in such cases after several years. The petitioner No.1 Company filed reply to the show cause notice issued by the respondent and thereafter, on 12.07.2003, the petitioner No.1 filed its written submissions.

4.7 Since the petitioner Company did not hear anything from the department after filing of their reply on 12.07.2003, and a period of approximately 15/16 years has passed thereafter and no steps have been taken by the concerned respondent for proceeding with the adjudication of impugned show cause notice, the petitioners are, therefore constrained to file the present petition seeking relief of quashment of the impugned show cause notice.

We have heard Mr. Paritosh Gupta for Gupta Law Associates, learned advocate for the petitioners and Mr. Viral K. Shah, learned advocate for the respondent No.2.

Mr. Paritosh Gupta, learned advocate for the petitioners submitted that the show cause notice was issued on 25.09.2000 and thereafter, no adjudication proceedings were conducted or concluded by the concerned Authority within a reasonable period. There was no reason for the respondent Authority not come to complete the adjudication of the show cause notice and therefore, the show cause notice that was kept pending for than 15 to 16 years is in gross violation of the principles of natural justice. He further submitted that the issue involved in the present petition is no longer res integra and the show cause notice issued by the respondent is in clear breach of the statutory mandate of Section 11A(11) of the Customs Act and can no longer be sustained. In support of his submissions he placed reliance on the decision of this Court in the case of M/s. Siddhi Vinayak Syntex Pvt. Ltd. (Supra) and M/s. Parimal Textiles (Supra) and submitted that the case could not have been kept pending for so many years and the delay of more than 15 to 16 years is fatal and amounts to re-opening the case. It was submitted that no mala fide or any other default is attributable to the petitioner for the delay in adjudicating the show cause notice. The petitioner filed its written submissions on 12.07.2003 and thereafter, after a passage of more than 15 years, the petitioner company has heard nothing in this regard from the respondents. Hence, the show cause notice is required to be quashed and set aside by allowing the petition.

Mr. Viral Shah, learned advocate for the respondents submitted that present petition is not maintainable as the impugned show cause notice has been taken out from call book and personal hearing notices were issued to the petitioners to adjudicate the show cause notice. He further submitted that the petitioners have failed to prove the value declared by for the subject consignment vide the letter No.B/E. 706/18.09.2001/IMPORT - DSBO dated 28.09.2001 issued by the respondents. He, therefore, urged to dismiss the petition.

We have heard learned advocates of either side and we have also perused the documents on record. It is undisputed fact that the issue involved in the impugned show cause notice had for the year 2001. It also emerges that it is undisputed fact that the respondent Authority had issued show cause notice on 25.09.2002 and in response to the same, on 12.07.2003, the petitioner made detailed reply along with written submissions by relying the decisions in the case of M/s. Siddhi Vinayak Syntex Pvt. Ltd. (Supra) and M/s. Parimal Textiles (Supra) etc.

In our view, the issue involved in this petition is therefore, squarely covered by the decisions of this Court and the impugned show cause notice dated 25.09.2002 cannot be permitted to be processed further and is also required to be quashed and set aside.

Similar issue raised for consideration before this Court in the cases of Parimal Textiles Vs. Union of India reported in 2018(8) G.S.T.L. 361 (Guj.) as well as M/s. Siddhi Vinayak Syntex Pvt. Ltd. (supra), more particularly paras

23 and 24, which read as under:

"23. Insofar as the show cause notice in the instant case is concerned, the same has been issued under section 11A of the Act. Proceedings under section 11A of the Act are adjudicatory proceedings and the authority which decides the same is a quasi-judicial authority. Such proceedings are strictly governed by the statutory provisions. Section 11A of the Act as it stood at the relevant time when the show cause notice came to be issued, provided for issuance of notice within six months from the relevant date in ordinary cases and within five years in case where the extended period of limitation is invoked. Section 11A thereafter has been amended from time to time and in the year 2011, various amendments came to be made in the section including insertion of sub-section (11) which provides that the Central Excise Officer shall determine the amount of duty of excise under sub-section (10) -

(a) within six months from the date of notice where it is possible to do so, in respect of cases falling under subsection (1);

(b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under subsection (4) or sub-section (5).

Thus, with effect from the year 2011 a time limit has been prescribed for determining the amount of duty of excise where it is possible. It cannot be gainsaid that when the legislature prescribes a time limit, it is incumbent upon the authority to abide by the same. While it is true that the legislature has provided for such abiding by the time limit where it is possible to do so, sub-section (11) of section 11A of the Act gives an indication as to the legislative intent, namely that as far as may be possible the amount of duty should be determined within the above time frame, viz. six months from the date of the notice in respect of cases falling under subsection (1) and one year from the date of the notice in respect of cases falling under sub-section (4) or sub-section (5) . When the legislature has used the expression "where it is possible to do so", it means that if in the ordinary course it is possible to determine the amount of duty within the specified time frame, it should be so done. The legislature has wisely not prescribed a time limit and has specified such time limit where it is possible to do so, for the reason that the adjudicating authority for several reasons may not be in a position to decide the matter within the specified time frame, namely, a large number of witnesses may have to be examined, the record of the case may be very bulky, huge workload, non-availability of an officer, etc. which are genuine reasons for not being able to determine the amount of duty within the stipulated time frame. However, when a matter is consigned to the call book and kept in cold storage for years together, it is not on account of it not being possible for the authority to decide the case, but on grounds which are extraneous to the proceedings. In the opinion of this court, when the legislature in its wisdom has prescribed a particular time limit, the CBEC has no power or authority to extend such time limit for years on end merely to await a decision in another case. The adjudicatory authority is required to decide each case as it comes, unless restrained by an order of a higher forum. This court is of the view that the concept of call book created by the CBEC, which provides for transferring pending cases to the call book, is contrary to the statutory mandate, namely, that the adjudicating authority is required to determine the duty within the time frame specified by the legislature as far as possible. Moreover, as discussed hereinabove, there is no power vested in the CBEC to issue such instructions under any statutory provision, inasmuch as, neither section 37B of the Central Excise Act nor rule 31 of the rules, envisage issuance of such directions. The concept of call book is, therefore, contrary to the provisions of the Central Excise Act and such instructions are beyond the scope of the authority of the CBEC. Transferring matters to the call book being contrary to the provisions of law, the explanation put forth by the respondents for the delay in concluding the proceedings pursuant to the show cause notice 3.8.1998 cannot be said to be a plausible explanation for not adjudicating upon the show cause notice within a reasonable time. In view of the settled legal position, as propounded by various High Courts, with which this court is in full agreement, the revival of proceedings after a long gap of ten to fifteen years without disclosing any reason for the delay, would be unlawful and arbitrary and would vitiate the entire proceedings.

In the case of Shivkurpa Processors Pvt. Ltd. Vs. Union of India reported in 2018 (362) E.L.T. 773 (Guj.). In the case of Shivkrupa (Supra), this Court has held as under:

"10. We have heard learned counsels for the parties and perused the documents on record. The undisputed aspect that emerged from the proceedings would unequivocally indicate that notice dated 22.8.2002 did not result into any order for quite sometime and as per say of respondent, it was consigned to the call book as per the circulars prevalent. The authority appeared to have proceeded with broad aspect of the matter that nonreceipt of the said notice cannot be said to be established by the noticee and based thereupon, recording findings that concerned authorized person of the petitioner Company, who also is the signatory to this petition, did receive the notice and therefore, it cannot be in any manner correct on the part of the petitioners to say that there was no knowledge of existence of show cause notice dated 22.8.2002. We are of the view that this contention needs to be examined in light of the principles underlying the law, which is by now settled that inordinate delay in adjudication results into denial of principles of natural justice and that proposition cannot be said to be nonest in the present proceedings. The receipt of notice dated 22.8.2002 and findings recorded thereon would pale into insignificance, if the same is to be viewed in light of observations of the Court in case of Siddhi Vinayak Syntex Pvt. Ltd (supra), Alidhara Textile Engineers Ltd. (supra) and other decisions cited as bar.

The ground of alternative remedy is also does not impress this Court in any manner, as there is clear violation of principles of natural justice, which cannot be overlooked by any authority, therefore, this ground is also not available to respondent.

Learned counsel for the respondent attempted to develop the ground for resisting this petition based upon plea of prejudice. We are of the view that said ground would also not be available to the respondent, as notice dtd 22.8.2002 had not been acted for long long period of 17 years, that in itself is sufficient to accept and justify the plea of prejudice without any further probing into the matter. The resurrection of notice dated 22.8.2002 assuming for the sake of convenience without admitting that was admittedly after subsequent notice, then also, in view of established principles of law and provisions of statute, the said resurrection would be not permissible in light of decisions cited hereinabove."

It is also undisputed fact that the respondents after keeping the impugned show cause notice in the call book, have not chosen to follow up it for unduly long period. The act on the part of the respondents of keeping the impugned show cause notice in call book for unduly long period, without disclosing cogent reason for delay is arbitrary in exercise of powers and is also in violation of provisions of Section 11A of the Customs Act. It would in our opinion vitiate the entire proceedings.

For the foregoing reasons, the impugned notice dated 25.09.2002 is hereby quashed and set aside. Rule is made absolute. The parties are left to bear their own costs.