Polyglass Acrylic Manufacturing Co PVT LTD vs. The Additional Director General Through The Director Directorate Of Revenue Intelligence & Ors.

Facts

The Petitioner, Polyglass Acrylic Manufacturing Co Pvt Ltd, filed a writ petition challenging a Show Cause Notice (SCN) dated March 20, 2014, issued by the Additional Director General, Directorate of Revenue Intelligence (DRI). The SCN alleged mis-declaration and undervaluation of imported water purifier parts, leading to a demand for differential customs duty. The DRI suspected that the Petitioner, along with others, was used as a name-sake Import Export Code (IEC) holder by one Mr. Ashok Singla to import goods. The SCN proposed a re-determined assessable value of Rs. 52,64,80,439/- against a declared value of Rs. 15,06,62,426/-, resulting in a short payment of customs duty amounting to Rs. 8,81,92,681/-. The Petitioner sought to quash the SCN and declare the proceedings abated under Section 28(9) of the Customs Act, 1962, due to significant delays in adjudication.

Held

The Court held that the impugned Show Cause Notice (SCN) dated March 20, 2014, is liable to be quashed due to the unreasonable delay in its adjudication. The Court noted that the SCN had been issued approximately nine years prior to the present petition and had been repeatedly placed in and removed from the 'call book'. The Court found that this repeated practice did not constitute a valid justification for the prolonged non-adjudication. The Court emphasized that statutory authorities are obligated to establish genuine hindrances beyond their control that prevent them from proceeding with reasonable speed and dispatch. The Court referred to its own coordinate benches' decisions, which have consistently held that placing matters in the call book for years and then taking them up after significant delays is not permissible. The Court found the present case fully covered by these precedents, including Shri Balaji Enterprises v. Additional Director General New Delhi & Ors. Therefore, the Court quashed the SCN and allowed the petition. The operative direction was the quashing of the SCN.

Key Issues

1. Whether the proceedings initiated by the Show Cause Notice dated March 20, 2014, are liable to be abated under Section 28(9) of the Customs Act, 1962, due to unreasonable delay in adjudication? (Question of law) The Petitioner argued that the SCN was issued in 2014 and had remained unadjudicated for approximately nine years. They contended that the repeated placement of the case in the 'call book' and subsequent removal did not justify the prolonged delay. The Petitioner relied on various High Court judgments, including those of coordinate benches, which held that placing matters in the call book for extended periods is not permissible and that statutory authorities must adjudicate disputes with reasonable speed and dispatch. The Petitioner cited decisions like Nanu Ram Goyal v. Commissioner of CGST and Central Excise, Delhi, and Gala International Pvt. Ltd. v. Additional Director General, Directorate of Revenue Intelligence, Delhi and Ors. The Respondents (Revenue) argued, as indicated by their counter-affidavit, that the delay was necessitated by various factors, including judicial pronouncements and instructions from higher authorities. They stated that the adjudicating proceedings were affected by a High Court judgment in M/s Mangli Impex Ltd., leading to the case being transferred to the call book on December 16, 2016. Subsequently, it was taken out on January 3, 2017, for adjudication. Further delays occurred due to another High Court order dated May 30, 2017, in a related matter, which directed the transfer of such cases to the call book. The case was again taken out in November 2019 and later placed back in the call book in March 2021 due to the Supreme Court decision in Canon India Pvt. Ltd. The Respondents implied that these constraints prevented timely adjudication.