Bombay High Court
Parekh Shipping Corporation vs Asstt. Collector Of Cus., Bombay on 12 June, 1995
Equivalent citations: 1995(80)ELT781(BOM)
Author: S.H. Kapadia
Bench: S.H. Kapadia
JUDGMENT
M. L. Pendse, Acting C.J.
1. Rule returnable forthwith. Shri Siodia, learned counsel for the respondents, waives service. By consent, petition taken on record and called out for hearing. Heard counsel.
The petitioners were Agents of foreign flag Vessel "Duke" and which called at the Port of Bombay on March 18, 1983. The petitioners filed Import General Manifest indicating the cargo meant for discharge at the Port of Bombay. After completing discharge, the vessel sailed from Port of Bombay in the third week of March 1983.
2. The respondent No. 1 served show cause notice dated January 19, 1995 on the petitioners claiming that certain goods were reported as short-landed by Bombay Port Trust and the petitioners should account for the same or explained the short-landed goods or otherwise the penalty would be imposed under Section 116 of the Customs Act. The service of show cause notice has given rise to the filing of the petition under Article 226 of the Constitution of India.
2A. Shri Venkateswaran, learned counsel appearing on behalf of the petitioners, submitted that the provisions of Section 116 of the Customs Act should not be exercised after a passage of more than 12 years from the date of vessel leaving Port of Bombay. The learned counsel submitted that it is impossible for the Agents of Foreign Vessel to show cause as to whether the goods were short-landed, 12 years before the date of show cause notice. In our judgment, the submission is correct and deserves acceptance. It surpasses our imagination as to what prompted respondent No. 1 to wait for a duration of 12 years to issue show cause notice. The exercise of powers under Section 116 of the Customs Act, if necessary, must be undertaken within a reasonable time. Shri Venkateswaran submitted that the Customs Excise and Gold Control Tribunal has held that show cause notice issued beyond the period of five years from the date of vessel leaving the Port is arbitrary and unreasonable. In our judgment, the period of five years is more than reasonable. Indeed, the bond executed by the Agents should also be for a duration of five years and in case the respondents desire to proceed against the Agents, action must be taken before the expiry of the period. The bond should not be kept alive for all time to come and must be limited for a duration of five years from the date of execution. For these reasons, the show cause notice issued by respondent No. 1 cannot be sustained and petition must succeed.
3. Accordingly, rule is made absolute in terms of prayer (a). In the circumstances of the case, there will be order as to costs.