2024 (1) TMI 1085 - HC - Customs

DRI show cause notices stayed pending adjudication following FARMICO COMMODITIES precedent interim relief granted

The Bombay HC directed adjudication of show cause notices issued by the Directorate of Revenue Intelligence, following precedent from FARMICO COMMODITIES ... Delayed adjudication of the show cause notice - Jurisdiction to issue SCN - SCN issued by the Directorate of Revenue Intelligence - HELD THAT:- No different view can be taken from what has been taken in the case FARMICO COMMODITIES PRIVATE LIMITED (FORMERLY KNOWN AS WADHWANI COMMODITIES TRADING PVT. LTD.) VERSUS THE UNION OF INDIA THROUGH THE SECRETARY, DEPARTMENT OF REVENUE & ORS. [2023 (9) TMI 1413 - BOMBAY HIGH COURT], that is to admit the present petition. This Court had directed adjudication of the show cause notice, keeping open the contentions of the petitioners to be urged on such issues before the adjudicating authority. In so far as the interim reliefs are concerned, the impugned show cause notices dated 20 June 2007 and 24 May 2010 shall remained stayed. However, the respondents are at liberty to move this Court for vacating of the interim stay if the respondents are of the opinion, that such orders ought not to be continued and / or after the decision of the Supreme Court on the review proceedings filed in M/s Canon India Pvt. Ltd. and of the final adjudication on the challenge to the Finance Act 2022. Issues involved: Delayed adjudication of show cause notices, Jurisdiction of Directorate of Revenue IntelligenceFor the first issue of delayed adjudication of show cause notices, the petition filed under Article 226 of the Constitution sought to quash and set aside the impugned show cause notices dated 20 June 2007 and 24 May 2010 primarily on the grounds that delayed adjudication is not permissible as per settled legal principles. Reference was made to the case of 'Coventry Estates Pvt. Ltd Vs. The Joint Commissioner CGST and Central Excise and Anr.' (2023 SCC OnLine Bombay 2014) to support this contention. The petitioner emphasized that there cannot be a delayed adjudication of the show cause notice in accordance with established legal principles.Regarding the jurisdiction of the Directorate of Revenue Intelligence, the second contention was that the show cause notices issued by them are not within their jurisdiction based on the decision of the Supreme Court in the case of 'Canon India Pvt. Ltd Vs. Commissioner of Customs AIR 2021 SC 1699'. It was argued that the adjudicating authority has no jurisdiction to adjudicate the show cause notices issued by the Directorate of Revenue Intelligence. The petitioner referred to a previous order passed by the Court in a similar case involving a show cause notice issued by the Directorate of Revenue Intelligence and highlighted the need for the adjudicating authority to consider the legal position as laid down by the Supreme Court in such matters.In a separate judgment, the Court noted that the petitioner raised an additional ground that there cannot be delayed adjudication of a show cause notice issued almost 16 years back, followed by another show cause notice which was now about 11 years old. Considering the circumstances and the legal precedent set by the Supreme Court in the case of 'Canon India Pvt. Ltd.', the Court concluded that it cannot deviate from the approach taken in a previous case and admitted the present petition for further consideration.In conclusion, the Court ordered that the impugned show cause notices dated 20 June 2007 and 24 May 2010 shall remain stayed, allowing the respondents to move the Court for vacating the interim stay based on certain conditions. The Court emphasized the need for expeditious adjudication of the show cause notices within a period of three months, considering the significant delay in the adjudication process.