Raghav International Vs Union Of India & Anr. (Gujarat High Court)
Gujarat High Court held that it is settled legal position that authority cannot issue show cause notice after a period of three years for assessment/ export period. Accordingly, notice cannot be issued beyond the period of 3 years of payment of the duty drawback.
Facts- The petitioners are before this Court seeking to mainly challenge the show-cause notice issued by the respondent Authority after a period of about more than six/ten years, which are not permissible as per the settled legal position.
Conclusion- This Court had an occasion to deal with the identical issue in the case of M/s. S J S International and held that the authority cannot be issue show-cause notice after a period of three years for assessment / export.
Thus, when the issue is covered as per the decision of this Court as noted above in the case of M/s. S J S International, we allow all these petitions accordingly, quashing and setting aside the impugned show-cause notices issued by the respondent authorities, which are admittedly beyond the period of three years.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
The petitioners are before this Court seeking to mainly challenge the show-cause notice issued by the respondent Authority after a period of about more than six/ten years, which are not permissible as per the settled legal position.
2. Since common issue is involved in all these four petitions being Special Civil Applications Nos.7165, 8600, 8685 and 10699 of 2021, with consent of learned advocates for the respective parties, all the matters are heard together and are decided by this common Judgment.
3. The brief facts of the all these matters are epitomized as under :
3.1 Special Civil Application Number 7165 of 2021 :
3.1.1 The petitioners are engaged in business of export of ready-made garments falling under the Chapter Heading 61 and 62 of Customs Tariff Act, 1975. The petitioners are mainly exporting the goods to UAE and Africa.
3.1.2 The petitioners had exported various goods through various shipping bills during the period of 2011-2015. Such shipping bills were assessed finally by the proper officer and the said assessment had attained finality. Accordingly, the benefit of duty drawback pursuant to such assessment was given to the petitioners.
3.1.3 Respondent No.2 vide notice dated 16.03.2021 sought recovery of excess of the duty drawback so paid, during the year 2014-2015 under the provisions of Rule 16 of Duty Drawback Rules, 1995.
3.1.4 Therefore the petitioners have challenged such notice on various grounds, including the ground that the Show Cause Notice under Rule 16 cannot be issued beyond a period of 3 years being reasonable period of limitation, since no limitation is provided for under the Act or the Rules.
3.1.5 During the pendency of this petition, respondents No.3 to 5 issued Show Cause Notices dated 01.04.2021, 06.04.2021 and 20.05.2021, for the same assessment period from 2011 to 2015 and for the same shipping bills. These notices are also under challenge by the petitioners on the same grounds by appropriate draft amendment.
3.2 Special Civil Application Number 8600 of 2021 :
3.2.1 The petitioners of this petition are engaged in business of export of nuts, bolt, washer, hand tools etc., falling under the Chapter Heading 7318, 8205, 3926 of Customs Tariff Act, 1975. The Petitioners are mainly exporting the goods to Gulf and Upper Gulf Countries.
3.2.2 The petitioners had exported various goods through various shipping bills during the period between 01.01.2014 to 31.12.2014. Such shipping bills were assessed finally by the proper officer and the said assessment had attained finality. Accordingly, the benefit of Duty Drawback pursuant to such assessment was given to the petitioners.
3.2.3 Respondent No.2 vide notice dated 09.04.2021 sought recovery of excess of the duty drawback so paid during the aforesaid period under the provisions of Rule 16 of Duty Drawback Rules, 1995. It was therefore this petition was preferred challenging such notice on various grounds including the ground that the Show Cause Notice under Rule 16 cannot be issued beyond a period of 3 years being reasonable period of limitation since no limitation is provided for under the Act or the Rules.
3.3 Special Civil Application Number 8685 of 2021 :
3.3.1 The petitioners of this petition are engaged in business of export of fully threaded rods, pickaxe, hoe, Nuts, bolt, washer, hand tools etc. falling under the Chapter Heading 7318, 8205, 3926 of Customs Tariff Act, 1975. The Petitioners are mainly exporting the goods to Saudi Arabia, UAE, Kuwait, Jordan etc.
3.3.2 The petitioners had exported various goods through various shipping bills during the period from 2014 to 2015. Such shipping bills were assessed finally by the proper officer and the said assessment had attained finality. Accordingly, the benefit of Duty Drawback pursuant to such assessment was given to the petitioners.
3.3.3 Respondent No.2 vide notice dated 05.05.2021 sought recovery of excess of the duty drawback so paid during the aforesaid period under the provisions of Rule 16 of Duty Drawback Rules, 1995. It was therefore this petition was preferred challenging such notice on various grounds including the ground that the Show Cause Notice under Rule 16 cannot be issued beyond a period of 3 years being reasonable period of limitation since no limitation is provided for under the Act or the Rules;
3.4 Special Civil Application Number 10699 of 2021:
3.4.1 The petitioners of this petition are engaged in business of export of Nuts, bolt, washer, hand tools etc. falling under the Chapter Heading 7318, 8205, 3926 of Customs Tariff Act, 1975. The Petitioners are mainly exporting the goods to Gulf and Upper Gulf Countries.
3.4.2 The petitioners had exported various goods through various shipping bills during the period 2011 to 2016. Such shipping bills were assessed finally by the proper officer and the said assessment had attained finality. Accordingly, the benefit of Duty Drawback pursuant to such assessment was given to the petitioners.
3.4.3 Respondent No.2 vide notice dated 24.03.2021 sought recovery of excess of the duty drawback so paid during the aforesaid period under the provisions of Rule 16 of Duty Drawback Rules, 1995. It was therefore this petition was preferred challenging such notice on various grounds including the ground that the Show Cause Notice under Rule 16 cannot be issued beyond a period of 3 years being, reasonable period of limitation since no limitation is provided for under the Act or the Rules;
4. In view of above facts, the only issue which is to be decided by this Court is as to whether the respondent Authority can issue show-cause notice for assessment / export, after a period of six/ten years ?
5. Learned advocate Mr. Raval would waive service of notice of rule on behalf of respondent Authorities.
6. Learned advocate Mr.Dave for the petitioners has submitted that the respondent authority has issued a show-cause notice to the petitioner after a period of six/ten years, for the assessment / export of the year 2011 to 2015. He has submitted that it is a settle position of law that after a period of three years, the authority cannot issue any show-cause notice for the assessment /export period. He has replied upon the decision of this in the case of M/s. S J S International versus Union of India – Special Civil Application No.20484 of 2019, dated 09.12.2021 and has submitted that this Court has decided this issue in detail and held that the authority cannot be issue any show-cause notice for assessment / export period which is beyond three years. He has submitted that in the present case, the respondent authority has issued the show-cause notices after a period of six / ten years to the petitioners for the assessment / export period, which is not permissible under the law. He has submitted this these petitions may be allowed.
7. Learned senior standing counsel Mr. Nikunt Raval for the respondent Authorities has vehemently opposed these petitions. However, he has fairly submitted that the issue involved in this group of petitions is squarely covered by the decision of this Court rendered in M/s. S J S International (supra). He has submitted that appropriate order may be passed.
8. Except the main issue, as noted above, there are other contentions and grievances raised by the learned advocate for the petitioners in this group of petitions, but since there is no dispute with regard to the proposition laid down by this Court in case of M/s. S J S International (supra), which is accepted by the other side, learned advocate for the petitioners, under instructions, does not press other contentions at this stage, keeping his right open qua those contentions / grievances and therefore, the same are not dealt with by this Court here. It would be open for the either party to raise and/or rebut the other contentions / grievances before appropriate authority / forum / Court, in accordance with law.
9. In that view of the matter, this Court need to travel beyond the main issue as to whether the respondent Authority can issue show-cause notice after a period of six/ten years for assessment / export.
10. Under these circumstances, it is necessary to take into consideration the period of export / assessment, date of show cause notice and period after which notices are issued, which are as under :
