AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 681
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....their factory premises. However, the capital goods could not be put use for commercial production and the warehouse license No. 1/87 issued to them had been renewed upto 16.02.1991 got expired. Consequently, proceedings were initiated against the appellant for recovery of the duty of Rs. 21,85,474/- foregone on the imported goods which was not put to use as per the condition of import. On several rounds of litigation before various forums, finally in the de novo proceeding the Ld. Commissioner by the impugned order confirmed the demand of Customs duty amounting to Rs. 21,85,474/- under Section 72 read with Section 15 of the Customs Act, 1962 with interest and also directed confiscation of the goods under Section 111(o) of the Customs Act wi....
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....and perused the records. 6. We find that the facts are not in dispute inasmuch as even though the appellant had imported duty free capital goods and installed in their factory premises but failed to commence commercial production making use of those capital goods and thereby violated the condition of import. Attributing the reasons for non-commencement of production, it has been submitted on behalf of the appellant that due to Iraq-Iran war they could not get inputs necessary to make finished products, therefore, commercial production could not be undertaken even though capital goods installed were tested and trial runs were carried out. The Ld. Advocate vehemently argued that the warehousing period expired on 16.02.1991 and the demand w....
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.... (c) where any warehoused goods have been taken under section 64 as samples without payment of duty, and (d) where any goods in respect of which a bond has been executed and such goods are not duly accounted for to the satisfaction of the proper officer. 15. Section 72 thus provides for the power to collect duty under circumstances other than regular clearance of goods for home consumption. Under clause (b) of sub-section (1), the authorities have power to collect duty when it is found that the goods warehoused have not been removed even after the period permitted under Section 61 has expired. In the present case, admittedly, this clause would apply. By virtue of the Supreme Court order dated 21-1-1997, the petitioners h....
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....emand of the customs authorities for payment of duty after a long period of time. To reiterate the relevant facts, the maximum period for which the petitioners could have warehoused the goods got over by 21-1-1998 even if we take the date of the order of Supreme Court as the starting point. The present petition was filed on or around 29-11-2001. The first notice on the petition was issued by the High Court on 14-12-2001. On 28-12-2001, the court issued fresh notice. The same would have been served on the respondents particularly the Customs Department sometime thereafter. Thus, nearly four years passed after the period envisaged in Section 61(1) of the Act was over before the respondents were served with a copy of the present petition. Admi....
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....ted by the counsel for the petitioners and noted by us, such action cannot be initiated after an indefinite period of time. In absence of any statutory time-limit for recovery of duty, action should be initiated within reasonable time. What is reasonable time must depend on facts and circumstances of each case. In the present case, initial inaction on part of the customs authorities for four years before the petition was filed by itself must be seen as unreasonable delay on their part. Even after filing of the petition, total inaction on part of the customs authorities would preclude them from raising the demand for duty now. The impugned show-cause notice, therefore, must fail on this ground for being belated. 24. Quite apart from....