TMI Blog2014 (9) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... uty drawbacks should not be recovered. Therefore, it cannot be said that the addendum structurally alters the nature of the show cause notice and it is barred by limitation. - In fact no limitation has been prescribed for recovery of duty drawbacks. - petition dismissed - Decided against the assessee. - Writ Petition Nos. 44217-44219 of 2011 (T) - - - Dated:- 11-9-2013 - H. Billappa, J. Shri K. Parameshwaran, Advocate, for the Petitioner. Shri P.S. Dinesh Kumar, Advocate, for the Respondent. ORDER In these writ petitions under Articles 226 and 227 of the Constitution of India, the petitioners have called in question, the common order dated 4-7-2011 bearing Nos. 131-133/2011-CUS [2012 (281) E.L.T. 470 (G.O.I.)] passed by the second respondent vide Annexure-A. 2. By the impugned order at Annexure-A, the second respondent has confirmed the Order-in-Original vide Annexure-H and the order passed in appeal No. 168/2008 vide Annexure-J. 3. Aggrieved by that, the petitioners have filed these writ petitions. 4. Briefly stated the facts are : The 1st petitioner is a Company incorporated under the Companies Act. It is engaged in the activity of independent pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The petitioners preferred appeals in Appeal Nos. 206/2008, 207/2008, 208/2008, 209/2008-Cus. (B). The Commissioner of Customs (Appeals), Bangalore, by order dated 31-12-2008 rejected the appeals confirming the Order-in-Original No. 29/2008, dated 3-4-2008. 11. Aggrieved by that, the petitioners preferred revisions in F. Nos. 373/82, 83, 84/DBK/2009-RA before the Government of India. The Revisional Authority by its order dated 13-7-2011 has rejected the revisions confirming the Order-in-Original and also the order in appeal. 12. Aggrieved by that, the petitioners have filed these writ petitions. 13. The learned counsel for the petitioners contended that the impugned order cannot be sustained in law. He also submitted that the original show cause notice was issued on 18-7-2001. In the original show cause notice, the petitioners were asked to show cause as to why penalty should not be imposed on them. The petitioners were not asked to show cause as to why the duty drawback drawn by them should not be recovered. It is only in the addendum which was issued on 2-5-2002 the petitioners were asked to show cause as to why the drawback amount paid to the petitioners should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act is not applicable to the present case. It is only Section 75(a) and 75(a)(ii) which is applicable to the present case. He also submitted that in the original show cause notice all details were given asking the petitioners to show cause as to why penalty should not be imposed. But, there was no mention regarding recovery of duty drawbacks. Thereafter, addendum has been issued asking the petitioners to show cause as to why duty drawbacks should not be recovered. There is no structural change. Based on the same facts stated in the original show cause notice, the petitioners have been asked to show cause as to why duty drawbacks should not be recovered and penalty should not be imposed. Therefore, it cannot be said that the show cause notice or addendum is barred by time. Farther he submitted that the authorities on proper consideration of the material on record have rightly passed the orders confirming the demand made in the show cause notice. Therefore, the impugned orders do not call for interference. 16. Placing reliance on the decision of the Gujarat High Court reported in 2010 (260) E.L.T. page 61 and also of this Court reported in 1963 Income Tax Reports page 808, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 75A and also the interest on the same as contemplated under Section 28AA of the Customs Act, 1962 read with Rule 2(d) of Customs Central Exercise Duties Drawback Rules, 1995 as contemplated in Notification 49/96-Cus. (N.T.), dated 1-10-1996 inasmuch as M/s. Gemini Textile Industries have manufactured the goods in their 100% EOU premises and had cleared the finished goods in the name of M/s. R.V. Corporation (RVC) of Gemini group who in turn had claimed irregular duty drawback by suppressing the factual positions. (iv) The duty amounting to ₹ 9,56,981/- in respect of goods valued at ₹ 45,57,058/- exported through Bangalore Air Cargo Complex which has been claimed as drawback amount by Gemini Fashions Pvt. Ltd. (GFPL} a DTA unit of Gemini group should not be demanded under, sub-section (2) of Section 75A of Customs Act, 1962 read with Rule 2(d) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 as contemplated in Notification 49/96-Cus. (N.T.), dated 1-10-1996 inasmuch as M/s. Gemini Textile Industries had sent readymade garments for some specific job work without obtaining permission from the Customs Department and the same were not se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PK No. 108, Survey No. 21/22/23, Dasarahalli, Bangalore-57 are all required to show cause to the Commissioner of Customs, C.R. Building, PB No. 5400, Queen s Road, Bangalore-1, as to why penalty should not be imposed on them under Section 114(iii) of the Customs Act 1962, inasmuch as they have received and sent raw materials as well as finished goods from M/s. Gemini Textile Industries and claimed undue benefit of duty drawback in respect of goods manufactured by M/s. Gemini Textile Industries, thereby contravening the provisions of Customs Act, 1962 read with provisions (iii) to Rule 3(i) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. 21. By addendum dated 2-5-2002, changes have been made to the original show cause notice. The relevant paras read as follows : 3. In para 20 page 17 of the show cause notice in the 40th line after the words Section 28AA of the Customs Act, 1962 the following be incorporated. However, duty is demanded only in respect of claims made through Bangalore Air Cargo Complex. 4. Para 22(i) to (ix) in pages 18, 19 and 20 may be deleted and the following be substituted : Para 22. Now therefore, M/s. Gemini Textile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification 49/96-Cus. (N.T.), dated 1-10-1996 inasmuch as M/s. Gemini Textile Industries have manufactured the goods in their 100% EOUs premises and had cleared the finished goods in the name of M/s. Gemini Fashion (P) Ltd., (GFPL) of Gemini Group who in turn had claimed irregular duty drawback by suppressing the factual position. (ii) The duty amounting to ₹ 9,56,931/- in respect of goods valued at ₹ 45,57,058/- exported through Bangalore Air Cargo Complex which has been claimed as drawback amount by M/s. Gemini Fashions Pvt. Ltd., (GFPL), a DTA unit of Gemini Group should not be demanded under sub-section (2) of Section 75A of Customs Act, 1962, read with Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995 as contemplated in para 2(d) of Notification 49/96-Cus. (N.T.), dated 1-10-1996 inasmuch as M/s. Gemini Textile Industries had sent readymade garments for some specific job work without obtaining permission from the Customs Department and the same were not sent back after completion of job work but exported in the name of DTA unit of Gemini Group claiming duty drawback. (iii) Why penalty should not be imposed on them under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods manufactured by M/s. Gemini Textile Industries, thereby contravening the provisions of Section 75 of the Customs Act, 1962 read with Rule 16 of the Customs Act and Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. Para 25. M/s. Gemini Dyeing and Printing Mills Ltd., 16B, Peenya Industrial Area, 1st Phase, Bangalore-58 is hereby called upon to show cause to the Additional Commissioner of Customs, C.R. Buildings, Queen s Road, P.B. No. 5400, Bangalore, as to why; (i) the duty amounting to ₹ 53,618/-, in respect of goods valued at ₹ 2,55,322/- exported through Bangalore Air Cargo Complex which has been claimed as drawback amount M/s. Gemini Dyeing and Printing Mills Ltd., (GDPM a DTA unit of Gemini group should not be demanded under sub-section (2) of Section 75A of the Customs Act, 1962 read with Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, as contemplated in Notfn. No. 49/96-Customs (N.T.), dated 1-10-1996 inasmuch M/s. Gemini Textile Industries had sent readymade garments for some specific job work without obtaining permission from the Customs Department and the same were not sent back after completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In Torrent Laboratories Pvt. Ltd. v. Union of India (supra), a Division Bench of this Court in the context of Rule 57-I of the Central Excise Rules, 1944 held that in absence of any provision with regard to specific period of limitation, reasonable period of limitation has to be read into the rule. 22. Thus, it is a settled legal proposition that where a statutory provision does not prescribe any period of limitation for exercise of power thereunder, a reasonable period has to be read therein. As to what is a reasonable period would depend upon the facts of each case. 23. Examining the facts of the present cases in the light of the aforesaid legal position, in all these cases, drawback had been paid to the petitioners between December 1995 and August 1996. Thereafter, despite a clarification having been issued as regards the interpretation of condition (c) of the Note under SS No. 5404(1)(i) of the Drawback Schedule, no action was taken by the concerned authorities at the relevant time. It is only after a period of more than three years that show cause notices came to be issued to the petitioners seeking to recover the differential amount of drawback erroneously paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. v. Commissioner of Customs reported in 2010 (260) E.L.T. page 61, the Gujarat High Court has observed as follows : 11. Another contention advanced on behalf of the appellant is that in the light of the provisions of Section 28 of the Customs Act, the extended period of limitation could not have been invoked. However, the said contention does not merit acceptance, inasmuch as a perusal of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 ( the Drawback Rules ) which have been framed in exercise of the powers conferred under Section 75 of the Act, it is apparent that the provisions regarding drawback are self-contained provisions. The Drawback Rules nowhere provide for any limitation for recovering any amount of drawback erroneously paid. In the circumstances, the contention that the extended period of limitation could not have been invoked is misconceived. Even otherwise, in light of the fact that the appellant had claimed drawback on the excise duty component without there being any supporting manufacture, the claim would squarely fall within the ambit of wilful misstatement or suppression of fact as envisaged under the proviso to Section 28 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and I do not think it can be suggested that because the ordinary form prescribed for such a demand contemplates that it will be issued during the current year of assessment, it is tantamount to an enactment that it cannot be issued afterwards. If any part of the form should be applicable to the particular facts of the case then I presume it can be altered in the ordinary course before the form is sent out, but the mere fact that forms are prescribed under the Act does not seem to me to carry with it the result that unless everything is done exactly as provided by the form it is of no force and effect. The above observations are undoubtedly of no assistance to Sri Srinivasan s client. On the other hand, they repel the contention advanced by Sri Srinivasan. But Sri Srinivasan wants us to reply on the further observation : Although no time is prescribed for issuing the notice in question I suppose it may be said that such a notice must be issued within a reasonable time. What would be a reasonable time might vary according to circumstances. This observation of the learned Chief Justice is clearly obiter. If the legislature did not choose to prescribe any period of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess any opinion upon this point inasmuch as in their view and for the reasons which they will now proceed to give it does not call for determination in the present case Even if we had agreed with the contention that a notice under Section 29 should be issued within a reasonable time, we are of the opinion that in the circumstances of this case the notice issued to the assessee petitioner was within a reasonable time. 27. From the above decisions, it is clear, if the limitation is not prescribed by the Statute, the Court cannot prescribe any limitation. However, in the facts and circumstances of each case, the Court can consider whether the exercise of power had the effect of disturbing rights of a citizen. 28. In the present case, the show cause notice has been issued to the petitioners along with others on 18-7-2001. In the show cause notice all facts have been mentioned. The petitioners have been called upon to show cause as to why penalty should not be imposed on them under Section 114(iii) of the Customs Act, 1962. In the original show cause notice, the petitioners were not asked to show cause as to why the duty drawbacks should not be recovered. However, in the adden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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