Inordinate and unexplained delay in adjudication of show cause notices under the Customs Act warrants quashing of such notices.

JUDGMENT :

M.S. SONAK, J.

1. Heard learned counsel for the parties.

2. Rule. The Rule is made returnable immediately at the request of and with the consent of the learned counsel for the parties.

3. The Petition challenges the show cause notice dated 16 May 2008, which has been pending adjudication before the Respondents for the last 15 years.

4. On 16 May 2008, the Respondents issued a show cause notice to the Petitioner seeking to impose a penalty under section 112(a) of the Customs Act, 1962, alleging inter alia a classification of clandestine clearance of 663 import assignments without payment of appropriate duty.

5. The Petitioner filed detailed responses to the show cause notice dated 16 May 2008 on 01 October 2008 and 02 December 2008.

6. The record bears out that personal hearings were fixed on 03 December 2008, 04 December 2008 and 05 December 2008. The Advocates, on behalf of the Petitioner, did attend such hearings, but no effective hearing took place on the said dates. From December 2008 onwards, there was no progress until December 2011.

7. Again, in December 2011, a date was fixed for a personal hearing, and the Petitioner’s Advocate attended such a hearing. But still, there was neither an effective personal hearing nor was the show cause notice disposed of.

8. Nothing was done in the impugned show cause notice for the next five years. On 24 February 2017, almost 9 years after the issue of the show cause notice and 7 years after the last date fixed for hearing, another notice was issued to the Petitioner to attend the personal hearing scheduled on 24 February 2017. Again, the petitioner’s Advocate participated in the hearing, but there was no effective hearing. On 25 February 2021, 21 years after the issue of the show cause notice, and 4 years from the last date fixed for a personal hearing, another personal hearing was scheduled. This time, the Petitioner requested a hearing through video conferencing, but no link was provided.

9. In the above circumstances, the Petitioner, relying upon several decisions of this Court, has sought the quashing of the show cause notice and restraint on the proceeding further based upon the same. The respondents have filed an affidavit in this matter. On the perusal of the affidavit, we find no explanation for the non-disposal of the proceedings in the show cause notice from 2008 to 2021. There is a statement that on 17 March 2021, the show cause notice was transferred to the call book pursuant to the bold instructions No. 04/2021 issued vide F. No. Mumbai 450/72/2021-CUS-IV.

10. Except for the above statement in the Affidavit, no documents/file showing the actual transfer to the call book is shown or produced. Further, there is no statement that any intimation was given to the petitioner about such transfer.

11. In almost identical facts, the Division Benches of this Court in the cases of Coventry Estates Pvt. Ltd. Vs. The Joint Commissioner CGST and Central Excise & Anr. 2023 (10) Centax 38 (Bom), Eastern Agencies Aromatics (P) Ltd. Vs. Union of India & Ors. 2022 (12) TMI 323 (Bom), ICICI Home Finance Company Ltd. Vs. Union of India & Pr. CGST & CX Mumbai, 2024 (6) TMI 682 (Bom), Bhushan Vohra Vs. The Union of India & Ors. 2024 (9) TMI 713 (Bom), The Great Eastern Shipping Company Ltd. Vs. Union of India & Ors. Writ Petition No. 3605 of 2024 have held that when faced with such inordinate and unexplained delay, the show cause notice must be quashed and cannot be allowed to proceed.

12. Therefore, by adopting the reasoning in the said decisions rather than repeating the same reasoning in this order, we are satisfied that the case has been made out to quash the impugned show cause notice.

13. However, Mr. Mishra learned counsel for the respondents relied upon the order dated 10 July 2023 made by the Hon’ble Supreme Court in the case of Commissioner, GST and Central Excise Commissionerate-II & Ors. Vs. M/s Swati Menthol and Allied Chemicals Ltd. & Anr. disposing of Special Leave Petition (C) No. 2