Call Book Fluctuations Not Justification for 15-Year Delay in Customs SCN Adjudication: Delhi HC quashes Final Order [Read Order]

The Delhi High Court has quashed a 2008 show cause notice (SCN) issued by the Directorate of RevenueIntelligence (DRI) against Vijay Enterprises and others, citing unreasonable delay and violation of statutory timelines. The Court also set aside the consequential adjudication order passed in January 2024, calling it impermissible and unjust.

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The case involved allegations of mis-declaration and undervaluation in the import of newsprint and light-weight coated paper by Vijay Enterprises and its related entities. The DRI accused the firms of declaring undervalued prices—between USD 210 to USD 250 PMT—while the actual transaction values ranged from USD 350 to USD 600 PMT. It was also alleged that the companies paid the differential amount through unofficial hawala channels.

Following its investigation, the DRI issued a show cause notice on May 23, 2008, demanding payment of differential customs duty under Section 28(1) of the Customs Act, 1962. The notice proposed confiscation of goods, imposition of penalties, and recovery of interest. However, after initial hearings in 2010–2014, the proceedings stagnated.

The petitioners alleged they repeatedly requested the ‘relied upon documents’ (RUDs) from the department but received no substantive response. In 2023, with the SCN pending for 15 years, the petitioners approached the High Court seeking its quashing. In a surprising move, the customs authorities passed the Order-in-Original in January 2024 during the pendency of the writ petition.

The Court expressed serious concern over this parallel proceeding, noting that it rendered the judicial process “redundant.” Referring to multiple precedents, including Swatch Group India Pvt. Ltd. v. Union of India and Vos Technologies India Pvt. Ltd., the Court reaffirmed that indefinite delays in adjudication—particularly by citing transfer of files to and from the “call book”—are unacceptable.

Section 28(9) of the Customs Act mandates adjudication within six months to one year. The Court observed that repeated transfers to the call book between 2016 and 2022 failed to justify the delay. The SCN, it ruled, “stood vitiated due to inordinate delay,” and the Order-in-Original “cannot survive in the absence of a valid SCN.”

Citing judgments from the Delhi and Bombay High Courts, the Bench held that administrative lethargy or procedural delays cannot override the statutory mandates.

In light of these findings, the Court quashed both the 2008 SCN and the 2024 adjudication order, bringing long-pending proceedings against Vijay Enterprises to a close.

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