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Gujarat High Court

Kamdhenu Exim Private Ltd vs Union Of India on 20 December, 2018

Author: Umesh A. Trivedi

Bench: S.R.Brahmbhatt, Umesh A. Trivedi

         C/SCA/12200/2018                                   JUDGMENT




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 12200 of 2018


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
and
HONOURABLE MR.JUSTICE UMESH A. TRIVEDI
==========================================================

1     Whether Reporters of Local Papers may be allowed to NO
      see the judgment ?

2     To be referred to the Reporter or not ?                 NO

3     Whether their Lordships wish to see the fair copy of the NO
      judgment ?

4     Whether this case involves a substantial question of law NO
      as to the interpretation of the Constitution of India or any
      order made thereunder ?

==========================================================
                            KAMDHENU EXIM PRIVATE LTD
                                     Versus
                                 UNION OF INDIA
==========================================================
Appearance:
MR DHAVAL SHAH(2354) for the PETITIONER(s) No. 1,2
MR. S S IYER(6553) for the PETITIONER(s) No. 1,2
MR NIRZAR S DESAI(2117) for the RESPONDENT(s) No. 2,3
NOTICE SERVED(4) for the RESPONDENT(s) No. 1
==========================================================

    CORAM: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
           and
           HONOURABLE MR.JUSTICE UMESH A. TRIVEDI

                                 Date : 20/12/2018

                        ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE UMESH A. TRIVEDI) Page 1 of 5 C/SCA/12200/2018 JUDGMENT

1. RULE. Mr. Nirzar Desai, learned advocate waives service of notice of Rule on behalf of respondents. With the consent of the parties, the petition is taken up for final hearing today.

2. By way of this petition the petitioners challenges the Order-in-Original No.SRT/DIV-IV/ADJ-14/2018 dated 11.01.2018 passed by respondent No.3 - The Assistant Commissioner of CGST and Central Excise, Division-IV, Surat, as also the show-cause-notice dated 15.7.2004 which led to the passing of order-in-original dated 11.01.2018.

3. By the show-cause-notice dated 15.7.2004 raised demand of Rs.7,66,836/- towards central excise short paid on DTA clearances of waste and rejects of fabrics with penalty and interest as claimed in it.

4. When the matter came up for hearing on 10.8.2018 the court passed the following order:

"The petitioners have challenged an order-in-original dated 11.1.2018. Case of the petitioners is that the department invoking larger period of limitation had issued a show cause notice on 15.7.2004 demanding customs duties equivalent to Rs.7.66 lacs (rounded off) with interest and penalties. The petitioners had replied to the show cause notice at the relevant time. After reply of the petitioners which was filed in the year 2005, no further development took place. The proceedings remained dormant for years together. In the meantime, the petitioners exited EOU and shut down their manufacturing activities. Their correspondence address was also changed duly notified to the department. Thereafter without any further notice of personal hearing being served on the petitioners, the adjudicating authority passed the impugned order.

C/SCA/12200/2018 JUDGMENT

2. According to the petitioners, the order suffers from serious breaches of principles of natural justice. In any case having deactivated proceedings for more than a decade, the department could not have passed the said order. Petitioner relied on the judgment of this Court in the case of Siddhi Vinayak Syntex Pvt. Ltd., vs. Union of India, reported in 2017 (352) E.L.T. 455 (Guj.).

3. Notice returnable on 7.9.2018. By way of ad-interim relief, it is provided that the respondents shall not carry out coercive recovery arising out of the impugned order of adjudication.

4. Direct service for respondents No.2 and 3 is permitted."

5. Pursuant to the notice the Principal Commissioner of Customs, Ahmedabad, filed an affidavit-in-reply on behalf of respondent No.1 denying the contentions raised in the petition.

6. It is contended on behalf of the petitioners that the impugned order is arbitrary, illegal and unreasonable as, though the show-cause-notice is issued in the year 2004 and the response/reply to the same was filed by the petitioners in the year 2005, it has not been adjudicated upon for pretty long 13 years. It is also contended that the notices under the procedure prescribed for personal hearing in the year 2017 was also not served to the petitioners and therefore the order impugned is in breach of principle of natural justice.

The learned counsel for the petitioners has relied on the judgment of this court in the case of M/s. Siddhi Vinayak Syntex Pvt. Ltd. vs. Union of India [2017(352) ELT 455 (Guj.); the case of Pooja Tex Prints Private Limited and Page 3 of 5 C/SCA/12200/2018 JUDGMENT others v. Union of India and others [2017 SCC Online Guj.1840] as also the case of GPI Textiles Limited v. Union of India reported in [2018(362) E.L.T. 388 (P&H)] and the order of this court passed in Special Civil Application No. 18235 of 2017 dated 15.3.2018, and contended that keeping the adjudication proceedings for years together without any intimation to the petitioners and reactivating the same after a gap of nearly 14 years has resulted into miscarriage of justice.

7. Learned advocate Mr. Nirzar Desai for the respondents contended that the department has carried the decision rendered in Siddhi Vinayak Syntex Pvt. Ltd. (supra) before the Hon'ble Supreme Court and there the matter is adjourned sine die. However, learned counsel for the respondents is unable to show that the judgment rendered in Siddhi Vinayak Syntex Pvt. Ltd. (supra) is stayed by the Hon'ble Supreme Court.

8. We have given our thoughtful consideration to the order impugned and affidavit-in-reply filed by the respondents in support of the same but we are unable to accept the contention raised on behalf of the respondents that since the decision rendered in the case of Siddhi Vinayak Syntex Pvt. Ltd. (supra) is carried to the Hon'ble Supreme Court, the consideration of this case be kept sine die. Since inordinate delay in adjudication proceedings pursuant to the show-cause- notice for nearly about 14 years is unreasonable, without any explanation, without there being any fault on the part of the petitioners and the issue is covered by the decision relied on by the petitioners as referred to hereinabove, the petition is required to be allowed. The Order-in-Original No.SRT/DIV-

C/SCA/12200/2018 JUDGMENT IV/ADJ-14/2018 dated 11.01.2018 passed by respondent No.3

- the Assistant Commissioner of CGST and Central Excise, Division-IV, Surat, and the show-cause-notice dated 15.7.2004 which led to the passing of the order impugned are hereby quashed and set side. Rule is made absolute to the aforesaid extent with no order as to costs.

(S.R.BRAHMBHATT, J) (UMESH A. TRIVEDI, J) syed/ Page 5 of 5