Madhurkumar Ramkrishnaji Bajaj vs. The State Of Maharashtra Thr Principal Secretary And Ors
Facts
Mahindra and Mahindra Ltd. (the petitioner) filed a writ petition challenging a notice dated December 15, 2022, issued by the Office of Commissioner of Customs (Export) (respondent no. 2). The notice sought to recover duty foregone under Section 143 of the Customs Act, 1962, due to the non-submission of an Export Obligation Discharge Certificate against an Advance Authorization dated September 23, 1996. The petitioner argued that the proceedings were initiated approximately 26 years after the relevant authorization, making them hopelessly barred by delay, even though no specific limitation period is provided in the Customs Act for such recovery. The respondents contended that Section 143 of the Customs Act does not prescribe a time limit for enforcing the bond executed, thus the notice was not barred by limitation.
Held
The Court held that while Section 143 of the Customs Act, 1962, does not prescribe a specific time limit for recovery of duty foregone, it is a settled legal position that such proceedings must be initiated within a reasonable period. The Court found that a delay of approximately 26 years in initiating recovery proceedings for non-submission of an Export Obligation Discharge Certificate is not reasonable. The Court referred to Section 28 of the Customs Act, which provides a time limit of 5 years even in cases of alleged suppression or fraud, as a clue to what might constitute a reasonable period when no specific limit is provided. In this case, there were no allegations of fraud or suppression. The Court noted that the respondents made no attempt to explain the inordinate delay. Following the Supreme Court's decision in Union of India vs. Citi Bank and a coordinate bench's decision in Coventry Estates Pvt. Ltd. vs. The Joint Commissioner, CGST and Central Excise & Anr., the Court quashed and set aside the impugned notice. The Court found the proceedings to be barred by inordinate and wholly unexplained delay.
Key Issues
1. Whether the proceedings initiated by the impugned notice dated December 15, 2022, for recovery of duty foregone under Section 143 of the Customs Act, 1962, are barred by delay, considering the action was taken approximately 26 years after the Advance Authorization dated September 23, 1996. Petitioner's arguments: The petitioner contended that although Section 143 of the Customs Act does not explicitly provide a limitation period, proceedings must be initiated within a reasonable time. A delay of 26 years is unreasonable. They relied on the Supreme Court's decision in Union of India vs. Citi Bank. Respondents' arguments: The respondents argued that Section 143 of the Customs Act does not provide any time limit for the enforcement of a bond, and therefore, the impugned notice is not barred by limitation.
Sections Cited
Section 143, Section 28
AI-generated summary — verify with the full judgment below
ppn 1 916.wp-4339.24 (j).docx IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURI ICTION WRIT PETITION NO.4339 OF 2024 Mahindra and Mahindra Ltd. ) Having its registered office ) Tractor Division, Akurli Road, ) Kandivali East, Mumbai Suburban ) Mumbai – 400 101. ) through its Authorised Representative ) Mr. Ravi Poojary ) .. Petitioner Versus
Union of India ) Through the Secretary, ) Department of Revenue, ) Ministry of Finance, ) North Block, New Delhi- 110 001. )
Office of Commissioner of Customs(Export) New Customs House, ) Ballard Estate, ) Mumbai – 400 001. )
Deputy Commissioner of Customs ) DEEC (M. CELL) ) New Customs House, ) Ballard Estate, ) Mumbai – 400 001. )
Additional Director General ) of Foreign Trade, ) C. G. O., New Building, ) South East Wing, Marine Lines, ) Mumbai – 400 020. ) .. Respondents --- Mr. Bharat Raichandani a/w Mr. Jasmine Dixit i/by UBR Legal for the petitioner.
ppn 2 916.wp-4339.24 (j).docx Mr. Karan Adik for respondent nos.1 to 3. Mr. J. B. Mishra a/w
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