AI Structured Summary
Not yet generated for this judgment
Judgment
The petitioner assails the show-cause notice dated March 26, 2003 and a demand letter dated July 28, 2003 issued by the Customs authorities.
Learned Senior Advocate for the petitioners submits that, the impugned show-cause notice is for alleged shortlanding of goods. He refers to Section 116 of the Customs Act, 1962 under which such allegation has been levelled against the petitioners. He refers to various orders passed by the Court in the writ petition and submits that, diverse parties were directed to be added on the basis of materials coming to the notice of the Court.
Referring to the show-cause notice dated March 26, 2003 learned Senior Advocate for the petitioners submits that, the authorities had issued a corrigendum dated July 28, 2003 where the Customs authorities have sought to change their stand from the one taken in the first show-cause notice. He refers to the contents of the show-cause notice dated March 26, 2003 and submits that, the Customs authorities refers to Green Boat Notes and Blue Boat Notes. He submits that, the so-called Green Boat Notes and Blue Boat Notes were directed to be brought to the Court. He submits referring to the Boat Notes found in the custody of the Court that the same do not bear the colour as stated in the impugned notice dated March 26, 2003.
Learned Senior Advocate for the petitioners refers to an order dated December 11, 2003 and submits that, the Court had compared the Boat Notes produced before it. It had return a finding that, the system of the Boat authorities monitored the landing of the goods does not insure complete safeguard. He refers to the procedure then prevailing. He submits that, once a vessel arrived near the port, smaller vessel used to nee the carrier and the goods were offloaded to the smaller vessels. The smaller vessels transported the goods up to the dock. During all these period of time the goods were in the custody of the duly authorized person of the Customs authorities. He submits referring to the Boat Notes that, no person authorized by the Customs authorities had taken delivery of the goods at the time of unloading the vessels to the Boat for further transshipment. Therefore, the Customs authorities are not in a position to charge for shortlanding as sought to be done against the petitioners. He refers to other orders and the proceedings in the writ petition and submits that, one of the representatives of the respondent no. 6 has admitted that it has signed the Green Boat Notes. Such person is not authorized by the Customs authorities. Therefore, the Green Boat Notes cannot be a piece of evidence to sustain the allegation against the petitioners. Learned Senior Advocate for the petitioners refers to the affidavit filed by the Customs authorities which details the procedure for unloading of the goods. He refers to paragraph 4 of such affidavit and submits that, it is the claim of the Customs authorities that the unloading of the vessel was done in presence of the Preventive Officer of the Customs authorities and the signatures on the Green Boat Notes are of such Preventive Officer and the ship representative. He refers to the Green Boat Notes and submits that the same does not bear any signature of the Preventive Officer of the Customs authorities. He questions the role of the representative of the respondent no. 6 in the entire transaction. With regard to the maintainability of a writ petition against a show-cause notice he submits that, the writ petition is pending since July 2003. Since the writ petition is pending for such a long time, it should not be rejected simplicitor on the ground that, it is directed against a show-cause notice. He refers to the various orders passed by the Court and submits that, various steps have been taken in examining the parties. The Court had directed addition of the parties. He refers to 1982 Excise Law Times page 64 (Bombay) (Century Enka Limited & Ors. v. Union of India & Two Others) in support of his contentions. Referring to 2006 Volume 12 Supreme Court Cases page 33 (Siemens Ltd. v. State of Maharashtra), 2007 (207) Excise Law Times page 168 (S.C.) (Siemens Ltd. v. State of Maharashtra) and 1992 (58) Excise Law Times page 508 (Calcutta) (Indian Cardboard Industries Ltd. v. Collector of Central Excise) learned Senior Advocate for the petitioners submits that, when there is no basis for the show-cause notice it can be quashed by a Writ Court. Referring to 1986 (25) Excise Law Times page 948 (Bombay) (Shaw Wallance & Co. Ltd. v. Assistant Collector of Customs & Ors.) and 1987 (32) Excise Law Times page 617 (Bombay) (Mackinnon Mackenzie & Co. Ltd. v. Board of Trustees & Ors.) learned Senior Advocate for the petitioners submits that, a show-cause notice which is demonstrably without any basis and there being no material on record to sustain any of the allegations on shortlanding of cargo under Section 116 of the Customs Act, 1962 ought to be quashed.
Learned Advocate appearing for the Customs authorities submits that, the authorities had found shortlanding on the basis of Green Boat Notes and had issued the show-cause notice. The writ petition being directed against a show-cause notice, the petitioners should be directed to reply thereto and the authorities be permitted to decide thereon.
The respondent nos. 4, 5 and 6 are represented.
I have heard the rival contentions of the parties and the materials made available on record.
The writ petition is directed against a show-cause notice. The writ petition is of 2003. Diverse orders have been passed in the writ petition. Such orders include directions for adding respondents to the proceedings. Deposition has been taken in the writ petition.
Century Enka Limited (supra) is of the view that, where a writ petition is pending for more than two years before the Court, driving the petitioner to the quasi-judicial authority for reply to show-cause notice will only lead to multiplicity of the proceedings.
Siemens Ltd. (supra) is of the view that, ordinarily a Writ Court may not exercise discretionary jurisdiction in entertaining a writ petition questioning a notice to show-cause unless it is demonstrated that the show-cause notice was issued without jurisdiction and such notice was issued with premeditation.
Indian Cardboard Industries Ltd. (supra) is of the view that, a Court exercising jurisdiction under Article 226 of the Constitution of India will interfere with a show-cause notice when the show-cause notice ex facie or on the basis of the admitted facts does not disclose the offence alleged to be committed, when the show-cause notice suffers from an incurable infirmity, contrary to judicial decisions or decisions of the Tribunal, and when there is no material justifying the issuance of the show-cause notice.
Shaw Wallance & Co. Ltd. (supra) is of the view that, proceedings under Section 116 of the Customs Act are quasi judicial proceedings and have to commence to service of show-cause notice.
Mackinnon Mackenzie & Co. Ltd. (supra) on facts finds that, the basis of issuance of the show-cause notice to be entirely defective. It proceeds to strike down such show-cause notice.
Considering that the writ petition is pending from 2003 and diverse orders have been passed therein including orders directing addition of parties and persons having been examined in Court, it would not be appropriate to drive the petitioner to the quasi-judicial authority for reply at this stage. By the initial show-cause notice, the Customs authorities have alleged infraction of Section 116 of the Customs Act, 1962. By the addendum dated July 28, 2003 it is alleged in the showcause notice that, there is a shortlanding of goods as reported in the Green Boat Notes and the Blue Boat Notes.
The Green and the Blue Boat Notes are required to be signed by an officer authorized by the Customs.
Nothing has been shown to the Court to suggest the Green or Blue Boat Notes are signed by an officer duly authorized by the Customs authorities. A person of the respondent No. 6 appeared in Court and had deposed. He had acknowledged that, he had signed the Green Boat Notes. He is not an employee of the Customs authorities. No documents is placed before Court to suggest that the person of the respondent no. 6 signing the relevant Boat Notes was duly authorized by the Customs authorities to make entries in the Green Boat Notes and sign it on behalf of the Customs authorities.
The allegation of shortlanding made in the show-cause notice is on the basis of the notings made on the Green Boat Notes. Such allegation remains unsubstantiated and unsupportable in view of such Green Boat Notes not being signed by a person duly authorized by the Customs authorities. The Customs authority acknowledge in their affidavit that the Green Boat Notes are required to be prepared by the Customs officers and countersigned by the representative of the ship. In the present case, the Green Boat Notes have not been prepared by an officer of the Customs authorities.
In such circumstances, since the allegation of shortlanding cannot be substantiated on the materials made available on record, the impugned show-cause notice remains unsupportable. The impugned show-cause notice is, therefore, set aside. All steps taken pursuant to such show-cause notice are also set aside.
W.P. No. 1440 of 2003 is disposed of accordingly. No order as to costs.