TaxTMI 
TaxTMI 
2026 (9) TMI 575
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....assed beyond the permissible period, hence, this Court should quash the same in exercise of its writ jurisdiction. A. BRIEF FACTUAL BACKGROUND 2. The Petitioners herein are engaged in the business of importing duty free raw materials, in form of Electorlytic Copper Rods and exporting the same after value addition, i.e., by manufacturing Copper Wire/Power Cables. To carry out the aforesaid business, Petitioner Nos. 1 and 2 availed duty-free import benefits under Advance Authorisation Licences (AAL) issued by Director General of Foreign Trade (DGFT) under Notification No. 18/2015-Cus dated 01.04.2015 [hereinafter referred to as 'Notification 2015']. 3. In pursuance thereof, the Petitioner No. 2 was issued four such licences between 16.12.2019 and 03.06.2020, while Petitioner No.1 was issued five licences between 12.03.2020 and 19.08.2020. In accordance with the terms of AAL, the raw material had to be imported within one year of the license, and the furnished goods manufactured therefrom had to be exported within eighteen (18) months of import. Additionally, the importers were also to execute a bond in favour of the President of India, by which it undertook to fulfil the Exp....
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....ction to DGFT to consider and decide the same within 45 days. 9. Following the aforesaid Order, the Petitioners herein filed representations dated 07.04.2021 and 12.04.2021. In the interregnum, the Petitioners filed W.P.(C) 5756/2021 captioned Rajesh Gupta & Ors. v DGFT, seeking extension of EOP by a further period of twelve (12) months on account of the COVID-19 pandemic and the resultant force majeure circumstances; a restraint on coercive recovery of customs duty under Section 2.54 of Foreign Trade Policy (FTP) during the extended period; permission to make good any shortfall in raw material by procuring copper from the open market at their own cost; and parity with the relaxations granted by the Government in respect of statutory and contractual obligations during the pandemic and lockdown. 10. This Court by way of its Order dated 03.06.2021, recorded that the DGFT shall not initiate any coercive action against the Petitioners until the final decision is rendered in this regard. Subsequently, the DGFT rejected the representations made by the Petitioners by way of its Order dated 23.06.2021. Following which, the said Petition was also dismissed on 08.12.2023, while noting ....
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....the learned counsel representing the Parties, we deem it appropriate to note that no arguments were advanced by learned counsel representing the Petitioner on the merits of case. The challenge in the present Petition, rests solely upon the question of limitation/delayed adjudication undertaken by the AA under Section 28(9) read with Section 28(9A) of the Act of 1962. 16. Learned counsel representing the Petitioners has made the following submissions: 16.1 It is argued that as per Section 28(9)(b) of the Act of 1962, the Impugned SCN dated 24.06.2022 was required to be adjudicated within one year, i.e. by 24.06.2023. However, no determination or notice of personal hearing was made by the AA, with the first such communication having been issued only on 12.07.2023. 16.2 It is contended that the eight (08) months extension granted under the first proviso to Section 28(9) of the Act of 1962, was itself invalid, no opportunity of hearing was afforded to them, and no reasons were recorded for the failure of the proper officer to adjudicate within the prescribed period. It is urged that, in any event, even assuming the extension to be valid, the extended period expired on 24.02.20....
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....tue of Sections 28(9A)(a) and (b) of the Act of 1962, the proceedings were liable to be placed in the Call Book from inception, and no separate intimation of extension was necessary, particularly when the pendency of the writ petition and the interim order were brought to the Department's notice by the Petitioners' counsel only on 16.08.2023. 17.4 It is further argued that in terms of Section 28(9A) of the Act of 1962, the period prescribed under Section 28(9) commenced only upon cessation of the reason for non-determination, i.e. on 08.12.2023, when W.P.(C) 5756/2021 was dismissed. Therefore, the Impugned OIO dated 29.11.2024 was, within the permissible period ending on 07.12.2024. 17.5 It is argued that despite being afforded repeated opportunities of hearing on 25.07.2023, 16.08.2023, 13.09.2024, 15.10.2024 and 04.11.2024, the Petitioners either failed to appear or sought adjournments on the above-mentioned dates. Accordingly, the delay cannot be attributed to the Respondent, in order to challenge the Adjudication proceedings undertaken. 17.6 Reliance is placed on Collector of Central Excise, New Delhi v. Bhagsons Paint Industry (India) 2003 (158) E.L.T. 129 (S.C.), Com....
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....d, the proper officer shall inform the person concerned the reason for non-determination of the amount of duty or interest under sub-section (8) and in such case, the time specified in sub-section (9) shall apply not from the date of notice, but from the date when such reason ceases to exist.]" 19. At the outset, it is necessary to delineate that the present Petition raises a challenge to the Impugned OIO principally, and in substance exclusively, on the ground that the same came to be passed beyond the period prescribed under Sections 28(9) and 28(9A) Act of 1962, and is, therefore, without jurisdiction. Significantly, the Petitioners do not assail the substantive findings recorded by the AA under Sections 28(4), 28AA or 28AAA of the Act of 1962. They have neither disputed, on merits, the allegations concerning diversion of duty-free imported material, non-fulfilment of EOs, or breach of the conditions governing the Advance Authorisations, nor have they identified any specific factual or evidentiary error in the OIO. 20. The same position emerges from the representation dated 11.02.2025 seeking recall of the Impugned OIO, which is directed substantially towards limi....
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....t arose before it, which is as follows: "2. The principal ground of attack is the inordinate delay in the finalisation of the adjudication proceedings with the writ petitioners contending that the failure on the part of the respondents to conclude adjudication within a reasonable period of time and inordinately delaying the same for decades together would constitute a sufficient ground to annul those proceedings. They would contend that the principles of a 'reasonable period' which courts have propounded in connection with an adjudicatory function conferred upon an authority would apply and the impugned SCNs' and orders are liable to be quashed on this short score alone." 24. The aforestated makes it evident that the Court was concerned with the application of the principle of a "reasonable period" to adjudicatory proceedings which had remained pending for an inordinately long duration. Since the dispute before us arises out of Act of 1962, we shall proceed to examine the above-stated judgment in this limited sense. 25. In substance, the Court therein was confronted with SCNs which had remained dormant for approximately 15 to 18 years, followed by repeated and mechan....
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....o defer the present proceedings merely on the strength of the aforesaid direction. 29. Turning now to the statutory timeline applicable to the facts of the present case, it is noted that the Impugned SCN came to be issued on 24.06.2022 under Section 28(4) of the Act of 1962. Since the proceedings fall under sub-section (4), the applicable timeline under Section 28(9) is that prescribed by clause (b) thereof, namely, one (01) year from the date of notice, extendable by a further period of one (01) year under the First Proviso. An extension of eight (08) months granted by the Competent Authority under the First Proviso to Section 28(9) was communicated to the Petitioners vide letter dated 12.07.2023. Accordingly, absent the operation of Section 28(9A), the proceedings were required to be concluded, as extended, by 24.06.2024. 30. However, the subsequent course of events assumes determinative significance, since in the intervening period, the Petitioners themselves, by way of a written reply dated 14.08.2023, sought deferment of adjudication on account of pendency of W.P.(C) 5756/2021 before this Court and the interim Order dated 03.06.2021 operating therein, whereby the Respond....
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....ty was, inter alia, dependent upon compliance with the conditions governing the relevant AAL. As a consequence, the pendency of the said writ proceedings, coupled with the interim protection operating therein, constituted the circumstance which prevented the proper officer from proceeding to a final determination under Section 28(8) of the Act of 1962. 35. Thus, the Call Book entry of 18.08.2023 was merely consequential to the circumstance already placed before the AA by the Petitioners themselves. The Call Book was not the source of the statutory exclusion; it was the administrative manifestation of the fact that the adjudication could not, at that stage, appropriately proceed. Therefore, the legal consequence must be traced to Section 28(9A) of the Act of 1962 and not to the mere fact of transfer to the Call Book. 36. In these circumstances, the Petitioners' reliance upon the Paragraph 9.4 Circular of 2017 does not lead to a different conclusion. The Circular only regulates the administrative manner in which matters transferred to the Call Book are to be dealt with and is intended to secure transparency and accountability. However, absent an express statutory consequence ma....
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....fore, it is the underlying statutory circumstance, and not the administrative fact of Call Book transfer, which governs the computation. 41. In the present case, the circumstance falling within clause (b) ceased to exist on 08.12.2023, when W.P.(C) 5756/2021 came to be dismissed by this Court. Consequently, it is from 08.12.2023 that the 02 years statutory period contemplated under sub-section (9) is required to be reckoned. 42. On such computation, the base period of one year under clause (b) of Section 28(9) of the Act of 1962 would have expired on 08.12.2024. Since the Impugned OIO came to be passed on 29.11.2024, within this unextended base period, it is unnecessary for us to examine whether, or on what basis, the extension earlier granted under the First Proviso would attach to the freshly reckoned period commencing 08.12.2023. The time during which the proceedings remained impeded by the circumstance contemplated under clause (b) of Section 28(9A) could not, in any event, be reckoned against the Respondents. The statutory clock, properly computed, commenced only upon cessation of that circumstance on 08.12.2023; accordingly, the Impugned OIO was passed within the period....