Reasonable time limit for excess duty drawback recovery: long-delayed show-cause notices were held time barred and invalid.

Show-cause notices for recovery of alleged excess duty drawback under Rule 16 of the Duty Drawback Rules, 1995 were invalid because the power to recover erroneous drawback, though available through Section 142(1) of the Customs Act, had to be exercised within a reasonable time. The notices were issued about six to ten years after export or payment of drawback, long after the shipping bills had attained finality. The Gujarat HC held that such inordinate delay was beyond a reasonable period, followed binding precedent, and treated the notices as time barred and void, with consequential proceedings also falling.

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Issues: Whether show-cause notices issued for recovery of alleged excess duty drawback after a lapse of about six to ten years from the date of export or payment of drawback were valid under Rule 16 of the Duty Drawback Rules, 1995.

Analysis: Rule 16 provides for recovery of erroneous or excess drawback and enables recovery through Section 142(1) of the Customs Act, 1962, but it does not prescribe any express period of limitation. The Court followed the settled principle that where a statutory power is exercisable without an express limitation period, it must still be exercised within a reasonable time. The notices in these matters were issued long after the drawback had been granted and after final assessment of the shipping bills had attained finality. The Court treated the delay as far beyond a reasonable period and noted that the issue was already covered by binding precedent.

Conclusion: The notices were held to be time barred and invalid.

Final Conclusion: The petitioners succeeded, the impugned show-cause notices were quashed, and all consequential proceedings based on those notices also fell.

Ratio Decidendi: In the absence of an express limitation period, a statutory power to recover excess drawback under Rule 16 of the Duty Drawback Rules, 1995 must be exercised within a reasonable time, and notices issued after an inordinate delay are invalid.

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