The Delhi Bench of High Court has set aside the show cause notice issued by (DRI) for adjudication proceeding as there was a delay of 14 years in adjudication of show cause notice.
The petitionerGala International Pvt. Ltd has filed petitions impugning a common show cause notice dated 30.04.2009 (issued by respondent no.1, DRI.
The petitioners were primarily exporting ready-made clothing and leather goods to customers in Russia under the Rupee-Rouble Scheme as well as to other international customers under the Drawback Scheme during the time period from 2000 to 2005, according to the case’s brief facts. On the basis of information gathered by DRI officers from the Delhi Zonal Unit, a show cause notice was issued in the meantime.
The intelligence indicated that particular Indian businesses were involved in smuggling fabrics, leather products, and ready-made clothing to particular Russian firms. These exports were mostly done to take advantage of different export incentives, such as drawbacks provided by the Duty Entitled Pass Book Scheme (DEPB). It was claimed that the commodities from the putative Indian exporters had not actually been imported by the Russian enterprises but had instead been sent to other nations. It was also alleged that Indian exporters had falsified their invoices in order to receive more export incentives.
Kavita Jha, appeared on behalf of the petitioner and Harpreet Singh, appeared on behalf of the respondent.
After taking into account the argument, the Bench noted that during the lengthy time from April 3, 2009 to July 21, 2016, no concrete actions were done to resolve the impugned show cause notice.
The Bench observed that during this extended period, there were no obstacles preventing the concerned officers from moving forward with the adjudication, and it was obvious that the fact that the Adjudicating Authority had sent various communications to the concerned DRI officers regarding the supply of the RUDs was not a legitimate excuse for the delay in deciding the contested show cause notice.
The Bench came to the conclusion that delaying the adjudication of the contested show cause notice owing to the Call Book procedure was not warranted despite refusing to agree that it was not practical or viable for the Adjudicating Authority to do so until February 6, 2017.
The High Court ruled that because the deadline for adjudicating the show cause notice had long since passed, the DRI was no longer permitted to continue with the adjudication of the contested show cause notice.
The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan allowed the appeal filed by the petitioner holding that, “it is no longer open for the respondents to proceed with the adjudication of the impugned show cause notice. Accordingly, the impugned letters recommencing the adjudication proceedings are set aside. Since the period for adjudication of the impugned show cause notice has elapsed, the same cannot be adjudicated.”
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