Court Cancels Duty Recovery Notice After 26-Year Delay, Citing Unjustifiable Wait and Lack of Fraud.

The court quashed the notice issued by the respondent to recover duty under Section 143 of the Customs Act, 1962, due to the unreasonable 26-year delay in initiating proceedings. Despite the absence of a specific statutory time limit, the court determined that such a lengthy delay was unjustifiable, especially in the absence of fraud or suppression. By referencing precedents, the court concluded that the delay rendered the proceedings unjust and unsupported, leading to the setting aside of the notice and the disposal of the petition.

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Issues:
Challenge to notice seeking duty recovery for non-submission of Export Obligation Discharge Certificate after 26 years.

Analysis:
The petitioners challenged a notice issued by respondent no. 2 to recover duty foregone under Section 143 of the Customs Act, 1962, for not submitting the Export Obligation Discharge Certificate against an Advance Authorization dating back to 1996. The petitioner argued that the proceedings were time-barred due to the 26-year delay, citing the lack of a specific time limit under the Customs Act. The respondent contended that since Section 143 does not provide a time limit for enforcing the bond, the notice was not barred by limitation. The court noted that while the Act is silent on limitation, proceedings must be initiated within a reasonable period, determined by the Act's scheme. Despite no specific time limit, a reasonable period could not be considered as 26 years, especially without allegations of fraud or suppression, as Section 28 of the Customs Act sets a 5-year limit in cases of fraud. The court found the delay in commencing proceedings unreasonable and unjustified.

The court referenced the Supreme Court's decision in Union of India vs. Citi Bank, where a show cause notice issued almost a decade after a transaction was quashed due to delay. Additionally, a Co-ordinate Bench decision in Coventry Estates Pvt. Ltd. Vs. The Joint Commissioner analyzed delayed adjudication and quashed notices proposed after significant delays. The court, in line with these precedents, quashed the impugned notice dated December 15, 2022, due to the unreasonable delay of 26 years. The court held that the delay rendered the proceedings unjust and unsupported, ultimately setting aside the notice and disposing of the petition accordingly.

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