Supreme Court allows Department to issue summons without interference, emphasizing show cause notices before action.

The Supreme Court set aside the High Court's order and allowed the Department to proceed with summons issuance without interference, emphasizing non-interference unless exceptional circumstances exist. The Court ruled that the Department must issue show cause notices before proceeding against the exporter, clarifying that the investigation could continue after issuing such notices. The Tribunal's judgment in favor of the assessee on ten consignments was noted, but the Department was permitted to continue the investigation with the requirement of issuing show cause notices before taking further steps. The appeals were disposed of accordingly.

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Issues:
1. High Court interference at the stage of summons issuance.
2. Department's entitlement to proceed without show cause notice.
3. Adjudication of consignments and Tribunal's judgment.

Issue 1: High Court interference at the stage of summons issuance
In the case, the Supreme Court set aside the impugned order by consent in C.A. Nos. 82-83 of 2002. The Court emphasized that the High Court should generally refrain from interfering when the Department has issued summons, unless exceptional circumstances exist. The Court clarified that it had not examined the merits of the case and allowed the Department to proceed in accordance with the law. The appeals were disposed of accordingly.

Issue 2: Department's entitlement to proceed without show cause notice
Regarding C.A. No. 81 of 2002, the Court dealt with the question of whether the Department could proceed against the exporter without issuing show cause notices. The Court noted that while the Department had issued show cause notices for some consignments, it had not done so for others. The Court held that the Department could collect material in accordance with the law but could not proceed against the exporter without issuing show cause notices. The Court clarified that the Department could proceed with the investigation after issuing show cause notices, as per the law. The appeal was dismissed subject to the above conditions.

Issue 3: Adjudication of consignments and Tribunal's judgment
The Court mentioned that ten consignments had been fully adjudicated upon, with the Tribunal ruling in favor of the assessee. However, the Court clarified that this judgment would not prevent the Department from continuing the investigation. The Court reiterated that no further steps could be taken without issuing show cause notices. The Court emphasized that its order did not direct the Department to take any specific actions but merely clarified the legal position. The appeal was dismissed, subject to the above conditions.

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