2024-VIL-631-TEL-CU
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CUSTOMS High Court Cases

Customs - Initiation of proceedings at the behest of DRI - Misappropriation of duty free gold bullion received under SEZ Scheme for manufacture and export of studded gold jewellery - Issue of show cause notices under Section 28(4) of the Customs Act, 1962 Act without pre show-cause notice consultation - Challenge to the show cause notices on the ground of it being determinative in nature – HELD - The plain reading of CBEC dated 10.03.2017 would clearly and unambiguously reflect that the said master circular predominantly was for matters connected to the Central Excise Act. Nonetheless, it also applies to all other departments under the CBEC i.e. the Customs Department which is the relevant department in the present cases - A plain reading of clause 5.0 of the circular dated 10.03.2017 clearly envisages that the conditions stipulated in the said master circular would be an exemption to a proceeding drawn by way of preventive or in matters related to an offence under the Customs Act. The said clause clearly says that pre-show cause notice consultation is mandatory except for preventive/offence related show cause notices - the proviso to clause (a) to sub-section 1 of Section 28 of the Customs Act by way of an amendment was inserted making pre-notice consultation statutory in nature, hence, becoming mandatory. The fact that it has been inserted only for clause 28(1)(a) further indicates that there is deliberate omission or exclusion of the said pre-notice consultation so far as the other provisions under the Act are concerned, particularly, other provisions under Section 28 of the Act - it is not the case of the petitioners that the authority who has issues the show cause notices lacks jurisdiction, neither is the show cause notices under challenge on violations of the principles of natural justice. On this ground also, no case is made out by the petitioners calling for an interference – the writ petitions are dismissed - Whether the show cause notices are determinative in nature – HELD - the contents of the show cause notices by no stretch of imagination can be termed to conclusive or determinative in nature. On the contrary, if the petitioners are able to give a plausible and satisfactory explanation with cogent proof in support of their explanation and reasoning, there is no reason to believe that the authorities concerned would not appreciate the same and take appropriate steps and measures based upon the response so to be given by the petitioners - Whether the show cause notices are barred by limitation – HELD - Explanation 1 to Section 28 of the Act deals with the “relevant date” in connection with the said Section. In the instant case, the relevant date as per the documents enclosed along with the show cause notices i.e. the worksheet, shows the date to be 24.11.2017 i.e. the date of the bill of entry. Therefore, for all practical purposes, the limitation would be five (05) years from the relevant date, and hence, the show cause notices in the two writ petitions are within the extended period of limitation as envisaged under Section 28(4) of the Act. Moreover, even the aspect of limitation is one which could be factual as also legal which can also be looked into by appropriate authority basing upon the objections and reply that the petitioner would be raising to the show cause notices. The said cannot be determined in exercise of the writ jurisdiction of this Court even before the petitioners responding to the show cause notices.
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