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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, SANGEETA K. VISHEN, JJ.
YANGIR PROPERTIES AND TRADING LTD. - Petitioner
Versus
UNION OF INDIA - Respondent
SPECIAL CIVIL APPLICATION NO. 16615 of 2020
Decided On : 12-02-2021
Constitution of India, 1950 - Article 226 - Companies Act, 1956 - Central Excise Tariff Act, 1985 - Central Excise Act, 1944 - Section 3(1) - excisable goods - custom duty - Whether after remand made by Appellate Tribunal in year 2005, whether initiation of proceedings in year 2020 without putting the petitioners to notice of transfer of call book at any juncture in interregnum is permissible under law. More particularly, when petitioner has already sold of its factory and also surrendered his registration before authority - Grievance on part of petitioner is that inordinate delay of 15 years in purported adjudication of said show cause notice in post remand period of order of appellate Tribunal is ex facie without jurisdiction, without authority of law and in clear breach of principles of natural justice and such action is liable to be set aside on various grounds raised before this Court.
Finding of the court: Respondents while consigning the matter to the call book did not deem it fit to inform petitioner about it. Since in other cases, such proceedings had been dropped, the petitioner had reason to form a bona fide belief that proceedings in its case had also been dropped. After seventeen years, persons who were conversant with the case may not be available, documentary evidence may have been displaced. Thus, delay in deciding proceedings, that too without bringing it to notice of petitioner that case was transferred to call book and was therefore pending, causes immense prejudice to the petitioner. The revival of proceedings, therefore, is in complete breach of principles of natural justice and hence, impugned show cause notice and the order in original passed pursuant thereto, cannot be sustained - It is virtually impossible for anyone to then defend as the respondent itself does not have the papers and it was asking for the reply of the respondent. Even if that aspect is not considered, expecting the petitioner to adduce the evidence of the closed factory after 15 years is virtually impossible.
Result: Petition is allowed.
JUDGMENT :
SONIA GOKANI, J.
1. This is a petition preferred under Article 226 of the Constitution of India questioning and challenging the action of respondent authority with the following reliefs:
(b) That this Hon'ble Court be pleased to issue writ of prohibition or any other appropriate writ in the nature of prohibition under Article 226 of the Constitution of India prohibiting the Respondents their subordinates, servant and agents from in any manner proceeding further with the adjudication of F.no.V(ch.54) 03-10/Dem/2004 dated 16.04.2004, the then Commissioner of Central Excise and Customs, Surat-II.
(c) that pending the hearing and final disposal of this petition, this Hon'ble Court be pleased to restrain the Respondents by themselves, their officers, subordinates, servants and agents to refrain from acting upon or taking any further steps or proceedings in pursuance of and/or in implementation and/or in furtherance of the impugned show cause notice F.No.V/Ch.54)03=-10/Dem/2004 dated 16.04.2004, the then Commissioner of Central Excise and Customs, Surat-II.
(d) An ex-parte ad-interim relief in terms of prayer (d) above may kindly be granted;
(e) Such other and further order or orders as may be deemed just and proper in the facts and circumstance of the present case may kindly be granted.”
2. The facts, in a capsulized form, are as follows:
2.1 The petitioner is a company incorporated under the Companies Act, 1956, which manufactures Polyester Texturized Yarn (PTY) of Chapter 54 of the First Schedule to the Central Excise Tariff Act, 1985. During the period of dispute, it was 100% Export Oriented Unit (EOU).
2.2 Petitioner No.2 was a Director of petitioner No.1 company. The petitioner company was granted licence under section 58 of the Customs Act to operate as a private bonded warehouse for the storage of imported/indigenous machinery and equipment, raw materials, consumables, components, spares, packing materials and finished goods and machinery and equipment.
2.3 The petitioner removed, from time to time, the excisable goods from its warehouse/licensed factory at Shed A-1/5240, GIDC, Ankleshwar, with the permission of the Development Commissioner, in Domestic Tariff Area on payment of the Central Value Added Tax (CENVAT) under the proviso to section 3(1) of the Central Excise Act, 1944 (“the Act' for short).
3. A show cause notice F.No.V(Ch.54) 03- 10/Dem/2004 dated 16.04.2004 was issued by the Commissioner of Central Excise and Customs, Surat-II calling upon the petitioner to show cause as to why the Central Excise duty amounting to Rs.9,03,814/- on the finished goods valued at Rs.50,89,666/- and Central Excise duty amounting to Rs.26,62,651/- on the finished goods valued at Rs.1,36,63,606/- be not recovered from the petitioners under section 11A of the Act.
3.1 It also demanded the custom duty of Rs.78,74,022/- on the goods like imported POY valued at Rs.2,30,14,913/- under section 72 of the Customs Act, 1962 read with section 28(1) of the Customs Act, 1962 with further notice as to why the same be not confiscated under section 111(o) of the Act and penalties.
3.2 The same was replied on 21.08.2004 urging that the proceedings were liable to be dropped.
3.3 The Commissioner of Central Excise, Surat-II, vide ex parte order dated 08.08.2005, confirmed the demand of duty with interest proposed in the said show cause notice dated 16.04.2004 and imposed penalties on the petitioners.
4. Aggrieved petitioner preferred two separate appeals before the Customs, Excise and
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