In a customs appeal concerning delayed penalty proceedings under Section 61 of the Customs Act, 1962, the court upheld the REVENUE's appeal, rejecting the argument that the delay was fatal to the proceedings and dismissed the appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
CUAPP91-23.3
1/4
PNP
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CUSTOMS APPEAL NO.91 OF 2014
The Commissioner of Central Excise Customs and Service Tax
...Appellant.
versus
Firomenich Aromatics (India) Pvt. Ltd.
..Respondent.
Mr. A.S. Rao for the Appellant. None for the Respondent.
CORAM : B.R. GAVAI & A.S. GADKARI, JJ.
23rd March, 2015.
P.C. :
The Appellant Revenue has approached this Court being aggrieved by the order passed by the learned CESTAT, Ahmedabad dated 27th December 2013 thereby allowing the appeal filed by the Respondent who had in turn challenged the order passed by the Commissioner (Appeals), Central Excise and Customs, Daman.
It was found in the audit that during the period 2001-02 the Respondent had warehoused the goods beyond the period as provided under sub-section (2)(ii) of Section 61 of the Customs Act, 1962. As such, show cause notice came to be issued to the Respondent On 19th October, 2005 calling upon it to show cause as to why interest amounting Rs.10,80,331/- should not be demanded and as to why
2/4 CUAPP91-23.3
PNP
penalty should not be imposed under Section 117 of the Customs Act. The adjudicating authority confirmed the issue and imposed the penalty. An appeal was preferred by the Respondent before the Commissioner (Appeals). By order dated 1st February, 2008 the Commissioner (Appeals) dismissed the appeal of the Respondents. The Respondents thereafter preferred an appeal before the CESTAT which is allowed by the impugned order. Hence, the present Appeal.
5. We have perused the impugned order.
3/4
CUAPP91-23.3
PNP
61, the authorities are required to take action within a reasonable period. The learned CESTAT while allowing the appeal has relied upon the judgment of the Madras CESTAT in the case of C.C., Madras v. TVS Whirlpool Limited [ 1996(86) E.L.T. 144 (Tribunal) ] wherein the CESTAT has held that when no limitation is prescribed under the provisions, then an action has to be taken within a reasonable period and such reasonable period would very much vary from six months to five years. While holding so, the learned CESTAT has relied on the judgment of the Apex Court in the case of Government of India v. Citedal Fine Pharmaceuticals reported in 1989 (42) E.L.T. 515 (SC) . The Apex Court in the said case has in unequivocal terms held that when there is an inordinate delay in issuance of notice of demand, it would be open to the assessee to contend that it is bad in law on the ground of delay. The judgment of the Madras CESTAT in the said case was challenged before the Apex Court and the Apex Court in the case of Commissioner v. TVS Whirlpool Limited [ 2000(119) E.L.T.A 177 (SC) ] while dismissing the appeal filed by the Revenue the Hon'ble Supreme Court has observed thus : “It is only reasonable that the period of limitation that applies to a claim for the principal amount should also apply to the Claim in the appeals and they are dismissed with costs.”
PNP 4/4 CUAPP91-23.3
which were paid on various dates between 16th August, 2002 to 13th August, 2003. It would thus be clearly seen that insofar as there is a delay of more than three years from the date on which the first cause of action arose and more than two years from the date on which the last cause of action arose. The delay has not at all been explained. In that view of the matter, it cannot be said that the learned Tribunal was unjustified in holding that the delay in issuing show cause notice was not sustainable in law.
The Appeal is, therefore, without merit and dismissed.
(A.S. Gadkari, J.)
(B.R. Gavai, J.)
2 issues framed by the court
Whether the appeal was maintainable despite a delay of more than three years from the first cause of action under Section 61 of the Customs Act, 1962.
Whether the authorities are bound to take action within a reasonable period when no specific limitation is prescribed in Section 61.
Colour shows how this judgement treated each authority
C. C., Madras v. TVS Whirlpool LimitedReferred¶28
C. C., Madras v. TVS Whirlpool Limited [1996(86) E.L.T. 144 (Tribunal)]
Government of India v. Citedal Fine PharmaceuticalsReferred¶28
Government of India v. Citedal Fine Pharmaceuticals reported in 1989 (42) E.L.T. 515 (SC)
Commissioner v. TVS Whirlpool LimitedReferred¶28
Commissioner v. TVS Whirlpool Limited [2000(119) E.L.T.A 177 (SC)]
2 provisions across 1 enactments
The Commissioner of Central Excise Customs and Service Tax
Firomenich Aromatics (India) Pvt. Ltd.
B.R. Gavai
A.S. Gadkari
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
