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TMI Blog2019 (3) TMI 2050X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.04.1989, the respondent had issued a show cause notice, calling upon the petitioner to offer their explanation as to why the drawback amount of Rs. 2,64,390/- should not be recovered, in terms of Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1971. Consequently, the Adjudicating Authority had passed an order dated 16.10.1989, dropping further proceedings of the case by holding that the drawback rate had not appeared on the FOB value of the export goods and when the respondent had preferred an appeal before the Commissioner of Appeals, the appeal came to be allowed on 17.12.1990, holding that the aforesaid FOB value of the goods had not exceeded Rs. 14 lakhs as prescribed in the rate fixation letter dated 19.10.1987. 3. In the mean time, the drawback fixation letter dated 19.10.1987 came to be withdrawn on 04.05.1990 and the show cause notice dated 28.05.1990 was also issued for the recovery of the drawback amount. The petitioner had submitted that their reply stating that since they had given the FOB value after detecting the discount, it became lesser than Rs. 14 Lakhs and with the discount the value was more than 14 Lakhs. The conditions stip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice should be issued within a reasonable time. In the said petition, the Gujarat High Court has placed reliance on the decision of the Hon'ble Apex Court reported in 1989 (42) E.L.T. 515 (S.C) [Government of India v. Citedal Fine Pharmaceuticals] and held as follows: "6. As can be seen from the facts noted he rein above, at the relevant time when the petition came to be filed, matters involving identical issue were pending before the revisional authority. Subsequently, the revisional authority by an order dated 31-12-2003, rejected the review applications filed by the said petitioners. Being aggrieved by the said order dated 31-12-2003 as well as the earlier order dated 28-6-2002 passed by the revisional authority whereby, the revision filed by the revenue had been allowed, the affected parties preferred writ petitions before this Court being Special Civil Application No. 2039 of 2004 and other cognate matters. Vide judgment and order of even date, this Court for the reasons stated in the said order, allowed the petitions and set aside the orders impugned therein. It is an accepted position that the controversy involved in the present case stands concluded b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack was sought to be recovered from the petitioners. The revisional authority in the earlier order dated 28th June, 2002 has held that the Drawback Rules do not provide for any time limit and as such there is no time limit for issue of demand notice for recovery of drawback paid erroneously or in excess under rule 16 of the Rules. 18. rule 16 of the Drawback Rules provides that where an amount of drawback a/id interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs, repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962. Thus, apparently rule 16 of the Rules does not provide for any time limit for making recovery of excess drawback paid erroneously. The question, therefore, is when rule 16 does not prescribe any period of limitation, whether action can be taken thereunder after any length of time, or whether the concept of reasonable period has to be read into it. In this regard, it is by now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... none, though courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period. 21. In Torrent Laboratories Pvt. Ltd. v. Union of India (supra), a Division Bench of this Court in the context of rule 57-1 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto, including the impugned orders would fall, rendering the same unsustainable. 7. Applying the aforesaid decision to the facts of the present case, it may be recalled that the show cause notices in question came to be issued in February 2000 in respect of drawback paid prior to August 1996. Under the circumstances, by no stretch of imagination, can the show cause notices be said to have been issued within a reasonable time. Under the circumstances, the show cause notices have to be held to be bad on the ground of being time-barred. Once the show cause notices are held to be invalid, the very substratum of the order passed pursuant thereto including the impugned order would fall, rendering the same sustainable." The above observation of the Gujarat High Court by placing a reliance on the decision of the Hon'ble Supreme Court is self-explanatory. 9. In the instant case, the two shipping bill Nos. 11 and 29, dated 18.07.1986 and 13.02.1987, wherein the sanctioned letter fixing erroneous rate was made on 17.10.1987. The recovery letter came to be issued on 04.04.1989 and adjudication came to be made on 16.10.1989. The withdrawal was shown on 04.05.1990 and the show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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