TaxTMI 
TaxTMI 
2024 (7) TMI 331
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....espondents also being the same in both the writ petitions, we proceed to decide the two writ petitions by this common order. 4. The whole case revolves around the same parties on a show cause notice issued to them under Section 28(4) of the Act. The Directorate of Revenue Intelligence (in short, 'DRI') received certain information in respect of the misappropriation of duty free gold bullion received by the petitioners under the Special Economic Zone Scheme for manufacture and export of studded gold jewellery. 5. A search was conducted on the premises of the petitioners Sri Krishna group of companies and other entities along with the directors/partners. During the course of search, certain seizures were made and in respect of the said seizures, show cause notices dated 26.06.2020 and 27.06.2020 were issued under Section 124 of the Act. These two show cause notices were subjected to challenge by way of two different writ petitions i.e. Writ Petition No.29508 of 2021 and Writ Petition No.29531 of 2023. Initially the High Court granted an interim protection in both these writ petitions restraining respondents from initiating any consequential steps pursuant to the aforesaid two show ....
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....the case of Amadeus India Pvt. Ltd. vs. Principal Commissioner, Central Excise, Service Tax and Central Tax Commissionerate 2019 SCC OnLine Del 8437 it was contended that the Delhi High Court has held that the pre-show cause notice consultation is a mandatory requirement and it is only after pre-show cause notice consultation should the authorities decide whether there is a case made out for issuance of a show cause notice and followed by the proceedings thereon. 11. According to the learned Senior Counsel for the petitioner, the said circular dated 10.03.2017 does not show any exemption to any of the provisions of the Act so far as the instructions given in the circular being made applicable. Further, the provisions of Section 151A of the Act itself provides or empowers the Board to issue orders, instructions and directions to the officers of the Customs Department as a whole so far as assessment or disposal of a particular case in a particular manner is concerned and such instructions under the normal circumstances is mandatory in nature. 12. It was further contended by the learned Senior Counsel for the petitioner that the fact that they have included pre-show cause notice con....
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....ect to a thorough enquiry in accordance with the provisions of law, the respondent authorities could not have jumped into the conclusion at the time of issuance of show cause notice itself. For the said reason also, the impugned show causes notices are vitiated as regards the fairness of procedure that it is contemplated under the Act. 17. Referring to the landmark decision of the Hon'ble Supreme Court in the case of Seimens Ltd. vs. State of Maharashtra and Others (2006) 12 Supreme Court Cases 33, the learned Senior Counsel prayed for quashment of the show cause notices on the ground of it being determinative in nature. Learned Senior Counsel also relied upon the decision of the Hon'ble Supreme Court in ORYX Fisheries Private Limited vs. Union of India and Others (2010) 13 Supreme Court Cases 427 and contended that the Hon'ble Supreme Court in the said judgment has in very categorical terms reached to the conclusion that the show cause notice should be of a nature where the noticee is confronted with definite conclusion of the alleged guilt. According to the learned Senior Counsel, the Hon'ble Supreme Court in the said judgment has in very categorical terms held that the authorit....
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....throttle the proceedings at the stage of issuance of the show cause notices itself. 21. According to the learned Senior Standing Counsel for CBIC, nothing prevents the petitioners to enter appearance before the respondent authorities and submit their detailed reply and based upon their replies, the authorities should be left to take an appropriate call considering the contents that the petitioner shall raise to the allegations and contents of the show cause notices. 22. It was the contention of the learned Senior Standing Counsel for CBIC that, if at all, on perusal of the explanation and reply that the petitioners would give to the show cause notices, the respondent authorities after due deliberation on the same would take a decision to either drop the proceedings or to further proceed with the show cause notices and to take to its logical conclusion. Thus, for the aforesaid reasons also, according to the learned Senior Standing Counsel for CBIC, it was not justifiable to exercise the writ jurisdiction empowered upon this Court under Article 226 of the Constitution of India. 23. It was further contended by the learned ....
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....rview of preventive/offence related case. It was in this context that the show cause notices were issued and therefore, pre show- cause notice consultation clause as per the circular dated 10.03.2017 would not be attracted in this case. 27. As regards the contention of the learned Senior Counsel for the petitioner that the show cause notices are determinative in nature, the learned Senior Standing Counsel for CBIC took the Court through the contents of the show cause notices wherein the show cause notices at more than one places have reiterated that all the allegations have been referred to in the show cause notices, as it appears to be, which by now itself clearly indicates that it is neither conclusive in nature; nor is it determinative in nature. What is otherwise meant by the contents of the show cause notices is that, these being the factual findings derived in the course of search, prima facie, there appears to be the following violations and defaults for which the persons concerned are liable to be prosecuted and if found true, can also be penalized for the offences under the Act. 28. As regards the notices being barred by limitation, it was the contention of the learned S....
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....he proceeding is preventive and offence related, pre show cause notice consultation would not be mandatorily required to be followed, rather it would stand excluded. 32. So far as the judgment of the Delhi High Court relied upon by the learned Senior Counsel for the petitioner in Amadeus India Pvt. Ltd. (supra), upon perusal of the said judgment and the facts under which the said judgment was decided shows that the show cause notice under challenge in that case was one which was issued under the provisions of the Finance Act, 1994. It is also reflected that the show cause notice issued therein was not a preventive or offence related show cause notice, and therefore, the said judgment could not have been brought within the purview of the explanation that is carved out under clause 5.0 of the said circular dated 10.03.2017. 33. The High Court of Jharkhand recently in the case of Himanchal Construction Company Pvt. Ltd. vs. Union of India 2021 (377) E.L.T. 545 (Jhar) dealing with whether pre-show cause notice consultation is mandatory or not in paragraph No.11 held as under: "11. The SCN also indicates that had the third party information not been received by the department and in....
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.... nature, if we look into the contents of the show cause notices where after the lapses, defaults and violations committed by the petitioners so also the unauthorized operation done by the petitioners after having received duty free gold bullions for manufacturing and export of jewellery, a tentative demand was assessed and the petitioners were called upon to explain in respect of the omissions and commissions failing which the demand would have to be finalized. So also, as would be evident from paragraph No.29 of the show cause notice and paragraph No.30, it would reflect that the Department has called upon the explanation of the petitioners to the show cause notices as to why the amount specified in the various subparagraphs of paragraph No.30 should not be appropriated and charged from the petitioners for alleged violation, misappropriation and illegalities committed under the provisions of the Act by the petitioners. 36. Likewise, the reading of the paragraph No.31 would also show that the petitioners and various persons who have been charged for alleged misconduct, misappropriation and violations of the Act calling upon their explanation as to why they should not be penalized ....
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....tions has to be considered by this Court in the light of the following decisions. Moreover, a writ against a show cause notice is not maintainable. (i) In Union of India v. Kunisetty Satyanarayana, reported in (2006) 12 SCC 28 : AIR 2007 SC 906, the Hon'ble Apex Court, at paragraphs 13, 14 and 16, held as follows: "13. It is well settled by a series of decisions of this Court that ordinarily no writ lies against a charge sheet or show cause notice vide Executive Engineer, Bihar State Housing Board v. Ramdesh Kumar Singh, [JT (1995) 8 SC 33], Special Director v. Mohd. Ghulam Ghouse, [(2004) 3 SCC 440 : AIR 2004 SC 1467], Ulagappa v. Divisional Commissioner, Mysore, [(2001) 10 SCC 639], State of UP. v. Brahm Datt Sharma, [(1987) 2 SCC 179 : AIR 1987 SC 943] etc. 14. The reason why ordinarily a writ petition should not be entertained against a mere show cause notice or charge-sheet is that, at that stage, the writ petition may be held to be premature. A mere charge-sheet or show cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no juri....
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....ame on merits and in accordance with law. Accordingly, the writ appeals are allowed. No order as to costs. Connected miscellaneous petitions are closed." 39. A similar view was yet again taken by the Madras High Court in the case of Bharath Marine Co. vs. Commissioner of Customs; Assistant Commissioner of Customs 2018 LawSuit(Mad) 1813 wherein in paragraph Nos.22 to 28, it has been held as under: "22. In Abhishek Mudhra, the Court considered the validity of a show cause notice and identical contention was raised stating that the show cause notice was pre- judged and pre-decided the issue and it was pointed out that even though in the impugned show cause notice, the expression "admittedly" has been issued in more than one place, those words alone cannot be read to interpret the impugned show cause notice as being pre-conceived or pre-meditated and the allegations in the show cause notice have to be read in its entirety. 23. In KVS Cargo Vs. Commissioner of Customs (General) 2016 (343) E.L.T. 24 (Del.), a show cause notice was impugned before the High Court of Delhi on the ground that it was pre-meditated. The matter arose under CBLR and the show cause notice was issued under Re....
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....al position referred to the relevant Regulation and in fact, extract them and in the last paragraph held that the antecedents of the Custom Broker is not found to be satisfactory with reference to the obligations mentioned in the CBLR. 28. Admittedly, as on the date, when the petitioner's application for renewal of the custom broker licence was rejected, there was no conclusive finding rendered against the petitioner holding that their conduct was not satisfactory with relevant to the obligation mentioned in the CBLR. I said so, because the petitioner's custom brokers licence was suspended by an order of interim suspension dated 25.06.2014 in terms of Regulation 19(1) of the CBLR. The allegations were identical to that of the allegations contained in the show cause notice dated 31.10.2014. The petitioner filed their written submissions and requested for revocation of the order of interim suspension. The respondent by Order-in-Original dated 06.08.2014, revoked the order of interim suspension. The authority has recorded certain reasons of which one of the reasons being, the offence was detected on 02.09.2013 and the licence was suspended on 25.06.2014, which is almost nine....
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....r ready reference is again reproduced herein under: "(4) Where any duty has not been [levied or not paid or has been short-levied or short-paid] or erroneously refunded, or interest payable has not been paid, part- paid or erroneously refunded, by reason of,--- (a) collusion; or (b) any wilful misstatement; or (c) suppression of facts, By the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been [so levied or not paid] or which has been so short-levied or short-paid or two whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice." 42. Further, if we look into the contents of the show cause notices, the authority concerned have specifically mentioned that the show cause notices are being issued invoking the extended period of limitation, as would be evident from one of the clauses of the show cause notice, which for ready reference is reproduced herein under: "It appears from the facts mentioned hereinabove that SKELLP and its repr....
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....raight jacket manner holding a notice or an order to be barred by limitation unless factual matrix are thrashed out to ascertain the same. The Division Bench of this very High Court in one of its recent order dated 15.12.2022 in Writ Petition No.26086 of 2022 in paragraph No.3 has held as under: "3. Though learned counsel for the petitioner submits that the impugned order is beyond limitation, on going through the provisions of Section 73 of the Finance Act, 1994, we are of the view that this is a case, which may require adjudication as to whether the impugned order is, as a matter of fact, beyond limitation." 46. Endorsing the same view which has also been reiterated by practically all the High Courts and the Supreme Court time and again, we are of the considered opinion that the aspect of limitation, particularly, in the factual matrix of the present case is not one which could be determined by the writ Court. Therefore, we are unable to sustainthe said objection raised by the learned Senior Counsel for the petitioners. 47. For the aforesaid reasons, we do not find any of the three grounds raised by the petitioners to be strong enough for interdicting the show cause notices d....