The Bombay High court has quashed the Show Cause Notice alleging fraudulent export of polyester fabrics, directing Customs Department to return Rs.2 Crores along with 12% Interest.
A show-cause notice was issued to the Petitioner, Sushitex Exports under section 124 read with section 28 of the Customs Act, 1962. It was alleged therein that the Company had indulged in fraudulent export of polyester fabrics and duty-free import of Polyester Filament Yarn and other items. under D.E.E.C. Scheme in contravention of the provisions of the Act. In the course of investigation preceding such show-cause notice, a raid had been conducted at the premises of the Company on 9th August 1995.
The petitioners having been arrested, it is alleged by them that they were concealed pay an amount of Rs.68 lakh on 10th August 1995. It is further alleged that only after such payment, the Department agreed not to oppose their prayers for bail and consequently, the second and the third petitioners were released on bail by an order dated 10th August 1995 of the Additional Chief Metropolitan Magistrate, Mumbai. On subsequent occasions too, the petitioners claim to have further been forced to pay Rs.32 lakh and Rs.1 crore. They said, show-cause notice, inter alia, sought to recover the sum of Rs.2 crore, which the petitioners allege they were compelled to deposit, and adjust the same against the total demand of Rs.4,99,53,772/- mentioned in the show-cause notice.
The division bench headed by the Chief Justice Dipankar Dutta and Justice M.S.Karnik stated, at this distance of time, to agree with Mr. Jetly that the respondents should be granted liberty to conclude the proceedings. It is the petitioners who have approached the Court to have the impugned show-cause notice set aside. Had the petitioners not invoked the writ jurisdiction of this Court, the show-cause notice would have continued to gather dust. The petitioners, in such circumstances, cannot possibly be worse off for seeking a Constitutional remedy and thereby suffer an order to facilitate conclusion of the proceedings which, because of the inordinate delay in its conclusion, is most likely to work out prejudice to them.
The court directed that the sum of Rs.2 crore which the petitioners were required to deposit in course of investigation shall be returned with interest @ 12% per annum. Let such return be effected with interest within two months of receipt of a certified copy of this order by the respondents.
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