Rajesh H. Shukla, J.
1. The present petition is filed under Article 226 of the Constitution of India seeking a prayer for issuance of writ of certiorari or any other writ, order or direction quashing and setting aside the impugned order dated 11-8-1999 as well as the order dated 15-11-2007 and also the order dated 31-1-2008 passed by the CESTAT and the recovery notice issued pursuant thereto dated 24-2-2006 and also for the interim relief regarding the stay and implementation and execution of the aforesaid orders and the notice.
2. The facts of the case briefly stated are that the Petitioner is a company incorporated under the Companies Act, 1956 having the registered office at Mumbai. The Petitioner-company was carrying out the business of manufacturing, processing, importing, exporting and dealing in ready-made garments, made-ups, hosiery, knitted goods, yarn, textiles, jute, wool, fibre, plastics, leather goods and handicrafts of all kinds.
3. The Petitioner-company applied for a duty free advance license under DEEC scheme with Mumbai Joint CCI. Thereafter the Petitioner was also issued a Value Based License (under the provisions of Notification No. 203 of 1992) against the said application bearing licence No. 309151. It is averred that subsequently the Petitioner registered the said licence with the Mumbai Customs and according to the provisions of the Customs Act, 1962 executed the bond with necessary declarations with the Customs authorities at Mumbai.
4. It is averred that the Petitioner imported goods utilizing the advance licence through various bills of entries at Kandla Port and also cleared the consignments. Thereafter, the Petitioner-company commenced export towards completion and discharge of the export obligation as required by the advance licence and has produced details with regard to the same. It is therefore contended that the aforesaid licence No. 309151 was a "value based advance licence" and not a "quantity based advance licence" and therefore the Petitioner was not required to fulfil the obligation in quantitative terms. It is further contended that Respondent No. 3 has never issued any show cause notice inter alia alleging that the Petitioner has not completed the export obligation or violated the terms and conditions of the said licence. However, the impugned letter dated 24-2-2006 was issued by Respondent No. 2 demanding payment of customs duty in respect of import made by the Petitioner against the said advance licence after 13 years.
5. It is also specifically contended that the letter was received by the Petitioner at the residential address of one of its directors on 19-6-2006 along with copy of the Order-in-Original produced at Annexures 'B' and 'C respectively. It is also contended that the show cause notice was never issued upon the Petitioner and the Petitioner was never aware about the adjudicating proceedings in respect of imports made against the said advance licence.
6. It is further contended that the director of the Petitioner-company is aged about 74 years, suffering from ailments and due to the floods in the office situated at Matunga at Mumbai in July, 2005 documents were all destroyed. However, the director of the company Shri Babulal Lath made an application to DGFT, Respondent No. 3 herein, for the copy of the documents under the Right to Information Act, 2005 so as to enable him to instruct the advocate and file an appeal before the appellate forum, a copy of which is at Annexure D. However, he received a reply from Respondent No. 3 dated 2-11-2006. Thereafter, again by letter dated 9-4-2007, the Petitioner requested the Joint Director General Foreign Trade to confirm whether the Petitioner's name appears in the defaulters list. It was replied by letter dated 11-4-2007 by the office of Joint Director General Foreign Trade that the name does not appear in the defaulters list, a copy of which is produced at Annexures G & H.
7. The Petitioner, thereafter, on the basis of information collected and the documents preferred an appeal before the CESTAT and the impugned order came to be passed on the grounds, inter alia, that the CESTAT ought to have appreciated that the Order-in-Original was passed without affording any opportunity to the Petitioner as no notice was issued. It is further contended that it ought to have appreciated that the Petitioner cannot be held responsible for failure on part of Respondent No. 1 to serve the show cause notice before passing the order-in-original. It is also contended that the Respondent No. 1 issued the notice beyond the period of limitation of six months as provided in Section 28 of the Customs Act, 1962 and therefore the action was barred by limitation u/s 28(1)(b) of the Customs Act. It is also contended that the Petitioner had fulfilled the export obligations and there is gross violation of rules of natural justice and the impugned order-in-original as well as the order passed by the CESTAT as well as the notice issued pursuant thereto are illegal and bad in law. It is also contended that the adjudicating authority ought not to have passed an order confiscating the imported goods u/s 111(d) and 111(o) of the Customs Act and also ought not to have imposed penalty u/s 112 of the Customs Act. It is also contended that the order-in-original and the findings are not correct and the finding that the Petitioner has not cooperated during adjudication proceedings is baseless as no such opportunity was given to the Petitioner and therefore the entire proceeding is in violation of rules of natural justice and deserves to be quashed and set aside.
8. Mr. Percy Kavina, learned Sr. Counsel, appearing with Mr. S.P. Majmudar, learned advocate for the Petitioner, referred to the impugned orders and referring to the averments in the petition submitted that the impugned orders are passed in gross violation of the rules of natural justice inasmuch as not even the show-cause notice has been served or any opportunity has been provided. Learned Sr. Counsel Mr. Kavina emphasised that after long period the notice pursuant to the impugned order at Annexure C was served at the residential address of the one of the directors of the Petitioner-company though no show cause notice has been served to him. It has been recorded while passing the order-in-original that the show cause notice was issued dated 19-8-1997 and thereafter the Petitioner was granted a chance to be heard by the adjudicating authority in person vide letter dated 17-11-1998 and 11-1-1999 and the Petitioner had failed to remain present. Learned Sr. Counsel Mr. Kavina referring to these aspects submitted that in fact no such notices have ever been served and it has not been correctly recorded. He therefore submitted that as the notices were not served, the entire proceedings are vitiated and are in violation of principles of natural justice.
9. He also referred to the memo of appeal produced at p. 146 and the statement of facts and referring to the facts narrated therein submitted that the Appellant had registered the licence with Mumbai Customs in accordance with the then prevailing provisions of Customs Act, 1962 as well as the then prevailing foreign policy. He further submitted that necessary bonds and declarations were executed with the customs authorities at Mumbai. Therefore, there is no suppression and referring to the details he strenuously submitted that against the advance licence bearing No. 309151, exports have been made and he has referred to the statement of exports reproduced at p. 155. Therefore, learned Sr. Counsel Mr. Kavina submitted that only by notice dated 24-2-2006 received at the residential address of one of the directors of the company with the impugned order he was informed about the demand, though the order-in-original etc. have not been served upon him, nor any opportunity has been given.
10. Learned Sr. Counsel Mr. Kavina, therefore, submitted that under the Right to Information Act, 2005. Shri Babulal Lath, Director of the Petitioner-company, made an application before the Joint Director General Foreign Trade requesting for details which have been narrated in the statement of facts produced at p. 157 and he was informed vide letter dated 2-11-2006 by the office of Joint Director General Foreign Trade that they are not able to provide the information and the documents as it pertains to 1993 and unwanted files up to 1996 have been destroyed. Copy of the said letter is at Annexure F, p. 140. Therefore, learned Sr. Counsel Mr. Kavina submitted that though hearing is said to have taken place in 1997, the notice was served in February, 2006 for which now the impugned notices are issued and therefore they are required to be quashed and set aside.
11. Mr. Kavina, learned Sr. Counsel, referring to the impugned order passed by the Tribunal, submitted that the Petitioner, therefore, prepared an appeal and the impugned order came to be passed by the Tribunal imposing a condition for deposing Rs. 50 lakhs within a period of eight weeks. Learned Sr. Counsel Mr. Kavina submitted that the said order dated 31-1-2008 is also in violation of rules of natural justice as hearing cannot be conditional upon pre-deposit or subject to depositing such amount without proper adjudication. He also submitted that there are no findings and the objections by the Petitioner with regard to the facts are not considered by the Tribunal. Therefore, learned Sr. Counsel Mr. Kavina submitted that the matter may be remanded and the order may be quashed and set aside and the condition imposed with regard to condonation of delay in the impugned order passed by the Tribunal dated 31-1-2008 may be deleted.
12. In view of the submissions made by learned Sr. Counsel Mr. Kavina, it is required to be considered whether the present petition can be entertained or not.
13. Before appreciating the submissions canvassed by learned Sr. Counsel Mr. Kavina, it is necessary to advert to a few facts. The Petitioner, as stated in the petition, was granted advance licence No. 309151 and on that basis imports were made and according to the Petitioner the exports have been made. It is required to be mentioned that there is no record which is supplied to the director of the Petitioner-company under the Right to Information Act as per the communication at Annexure F. However, the conduct of Shri Babulal Lath, director of the Petitioner-company, is also required to be appreciated that the present petition is filed in the name of the company which is sworn by him as a director and as against the advance licence which he claims that he has fulfilled the obligation, it was for him to discharge the obligation which he has not done and the show cause notice was issued and thereafter the order-in-original came to be passed recording that "it further appeared that the importer had deliberately suppressed the fact regarding the availment of input stage credit (MODVAT) on the inputs used in the manufacture of export products and obtained wrongful availment of duty, free benefits against the said license." The show cause notice was issued and as there was no cooperation the Asst. Commissioner of Central Excise was directed to ascertain as to whether the importer had availed any input stage credit on the goods exported under the aforesaid licence.
14. The Asst. Commissioner of Central Excise reported, vide letter dated 26-7-1999, that the unit of M/s. Sunbeam Garments (P) Ltd. was closed since the past two years and the whereabouts of the party were unknown and therefore the order-in-original came to be passed dated 12-8-1999 and the Petitioner-company or the director has not moved any application or anything though it was an obligation for the Petitioner-company or its director to inform the authorities when the unit is closed and/or to make necessary declaration as required under the laws like the Customs Act or the Central Excise Act. It has not been done admittedly. The report has been made by the Asst. Commissioner of Central Excise as stated above and after a lapse of time the director who has sworn in the affidavit. Mr. Babulal Lath, makes an application to the Joint Director General Foreign Trade asking him to provide details with regard to the files under the Right to Information Act for which he addresses a letter dated 5-10-2006 at Annexure E, wherein he has mentioned his address as Director of M/s. Sunbeam Garments (P) Ltd. and his personal address as 304/A, Standard House, 83 M.K. Road, Mumbai.
15. Therefore, after having made an application to which reply was given vide communication dated 22-11-2006 (Annexure F) that the files are not available and they are destroyed which he receives in 2006 and thereafter also does not do anything and prefers an appeal on 11-4-2007 before the Tribunal. It is required to be mentioned that before that he also confirms addressing a letter to the Director General Foreign Trade to confirm whether the name of the Appellant appears in the defaulters list and when the office of Joint Director General Foreign Trade by communication dated 11-4-2007 confirms that their name does not appear in the defaulters list, the appeal is preferred and therefore the appeal could not have been filed on the same date when there is a specific averment in the memo of appeal with regard to this confirmation.
16. Be that as it may, the aforesaid appeal came to be filed with the application for condonation of delay stating that the order-in-original passed on 11-8-1999 came to be served only with the recovery notice on 19-6-2006 after a period of six years. Further, it has been stated about the ill-health of the director, Shri Babulal Lath, since 2004 onwards and therefore it was requested that the delay may be condoned.
17. As can be seen from the impugned order passed by the Tribunal at Annexure L dated 15-11-2007, in para 3 it is specifically observed that there is no satisfactory explanation given for the gross delay and there was no explanation at all for the delay between 19-6-2006 and 14-5-2007 when the appeal was filed. In other words, even if it is accepted for the sake of argument that the order-in-original with the notice was served only in June, 2006, still, the appeal came to be filed on 14-5-2007 after about a year for which no satisfactory explanation has been offered. The Tribunal has, therefore, observed, "ordinarily, we would have rejected the application simply on the ground that there was absolutely no explanation given for the period from 19th June, 2006 to 14th May, 2007 for the gross delay in the filing of the appeal and that even the explanation for the earlier period was wholly unsatisfactory. However, keeping in view the facts and circumstances of the case, as emanating from the record and the impugned order and the statement of the learned Counsel for the applicant about readiness of the applicant to deposit Rs. 50 lakhs in order to show the bona fides of the applicant as against the impression that the proceedings of the recovery have got protracted for about seven years, we direct that on the applicant depositing Rs. 50 lakhs (Rupees Fifty lakhs only) within eight weeks from today with the revenue authorities, there shall be condonation of delay in filing of this appeal."
18. This order came to be passed on 17-1-2008 by the Tribunal and further Misc. Application for modification was filed, which is at Annexure 'M' wherein it is stated in para 2 that the applicant had handed over the papers to Shri Hardik Modh, the advocate appearing before the Tribunal, in the month of August, 2007. As learned advocate Mr. Modh had been out of station he had given instruction to one Mr. Rahul Gajera, advocate, to seek adjournment and as learned advocate Mr. Gajera had no instruction, the order was passed and he-was informed over the phone by the director Shri Babulal Lath that the company was not in a position to deposit Rs. 50 lakhs and at the most would try to give bank guarantee. That bank guarantee is also not given. It has been contended that the applicant had not instructed the learned advocate that the applicant would deposit the amount. Therefore, when the said appeal along with order passed came before the Tribunal, the Tribunal has reflected clearly that the delay was condoned on the basis of the statement of the learned advocate that he was ready to deposit the amount of Rs. 50 lakhs as pre-deposit in order to show their bona fides. It is on the basis of this that the Tribunal/Bench accepted and the delay was condoned. Thereafter, the learned advocate submitted the misc. application for modification to wriggle out of the said commitment. Not only that, learned advocate Mr. Modh, as it is recorded, makes an offer to deposit an amount of Rs. 10 lakhs.
19. In view of the sequence of events reflecting the conduct of the Petitioner which has been noted as stated hereinabove, it does not require any lenient view or indulgence.
20. Therefore, the submissions made by learned Sr. Counsel Mr. Kavina much emphasising about the violation of rules of natural justice or the fact that the order-in-original was never served, show cause was never served, etc. will be of no help, particularly when there is no explanation with regard to the delay for the period from 19th June, 2006 to 14th May, 2007 as admittedly on 19th June, 2006 Shri Babulal Lath, director of the Petitioner-company, was served with the order. As stated above, in fact, he tried to confirm from different offices with regard to the status and having confirmed that the papers are not traceable, tried to move the Tribunal challenging the order-in-original with an application for condonation of delay. Therefore, the Tribunal, having taken a lenient view and specifically observing that there was no explanation for the gross delay, in order to provide an opportunity, passed an order to condone the delay on pre-deposit of Rs. 50 lakhs as against the liability of Rs. 2,75,08,740/-. Having obtained this order, in order to wriggle out, a misc. application was filed stating that it is not possible to comply with it and if Shri Babulal Lath had on telephone specifically instructed learned advocate Mr. Gajera, then there was no need for learned advocate Mr. Modh on the next occasion to make an offer that they are prepared to deposit an amount of Rs. 10 lakhs. On earlier occasion if it was specifically informed and the order was passed, there was no need for making an offer by learned advocate Mr. Modh on behalf of the Petitioner to deposit Rs. 10 lakhs. This reflects the attitude and falsehood.
21. Much emphasis is given by learned Sr. Counsel Mr. Kavina that for proceeding the show cause notice was not served or the order-in-original was not served till June, 2006. As it is reflected hereinabove, the Asst. Commissioner of Central Excise made an inquiry and the unit was found closed and there is nothing to show that the Petitioner-company or the director had made any declaration at the time of closure of the unit or had any communication about the change of the premises or the residence and when he wanted information he has addressed a letter which is replied and it is on the basis of this the Respondents have served Shri Babulal Lath, the director of the Petitioner-company, for which the grievance is made that subsequently it is served at his residential address and nothing has been served to the company at the address mentioned.
22. Though, strictly, the provisions of Code of CPC may not apply, but the analogy would be applicable that when the person or the party claims that he should be served with the communication or the notice, it is also obligatory for them to make necessary declaration, once there is a change in the address or if the unit is closed. The petition is filed in the name of the Company by the Director and if the unit was closed or whatever the development has taken place, it was obligatory to make declaration as the forms as prescribed would have been filled in at the relevant time disclosing the address and therefore the submissions that notice has not been served, cannot be accepted. Reliance is placed by learned Counsel referring to Section 28 regarding non-service of the notice, therefore would not help.
23. Similarly, the other procedure or the remedy under the Customs Act would have been availed of, but the Petitioner having not been vigilant as discussed above, cannot make any grievance to invoke the discretionary jurisdiction under Articles 226 and 227 of the Constitution of India. Further, it is required to be noted that the persons, who are aggrieved by the order of the Government or the executive or the Tribunal, must approach the High Court with expedition.
24. The Hon'ble Apex Court while dealing situation in a judgment in case of Durga Prashad Vs. Chief Controller of Imports and Exports, has observed and laid down with regard to exercise of discretion judiciously and reasonably in such cases. It was observed:
Likewise, the High Court acts on analogy of statute of limitation in proceedings under Article 226 though the statute does not expressly apply to the proceedings. The Court will almost always refuse to give relief under Article 226 if delay is more than the statutory period of limitation.
25. Similarly, in a judgment in case of Tilokchand Motichand and Ors. v. H.B. Munshi, Commissioner of Sales Tax, Bombay and Anr. AIR 1970 SC 8989, again referring to the exercise of discretion has laid down:
The question is one of the discretion
Please Login To View The Full Judgment!
for this Court to follow from case to case. There is no lower limit and there is no upper limit. A case may be brought within Limitation Act by reason of some Article but this Court need not necessarily give the total time to the litigant to move this Court under Article 32. Similarly, in a suitable case this Court may entertain such a petition even after a lapse of time. It will all depend on what the breach of the Fundamental Right and the remedy claimed are and how the delay arose. Therefore, reiterating the settled position that no hard and fast rule can be laid down and it depends upon discretion, which is required to be exercised reasonably. The underlying object is not to encourage the claims and the matters which have already been disposed of. 26. Another facet of the argument which is also much emphasised by learned Sr. Counsel Mr. Kavina that there cannot be any such pre-condition of deposit of money for condonation of delay as it is a right, is required to be appreciated. It is required to be mentioned that condonation of delay is required to be considered on the basis of the explanation and the justification given, which the court may consider in its discretion whether sufficient cause has been made out to condone the delay or not. Therefore, though the right to file an appeal is a statutory right, but if the party does not avail of the right, it misses the bus and therefore cannot claim as a matter of absolute right. It is also required to be mentioned that still, however, when such an application for condonation of delay is made, in light of settled legal position, it is liberally interpreted and the delay is condoned, but having regard to the gross facts, the Tribunal had imposed a condition of pre-deposit of Rs. 50 lakhs against the total liability of Rs. 2,75,08,740/-. The learned Sr. Counsel, though submitted that such a condition of pre-deposit of amount is not valid, no judgment or authority has been cited by him. 27. Therefore, we are not inclined to entertain the present petition and the present petition deserves to be rejected. The petition is accordingly rejected in limine. 28. Before we part with, it is required to be mentioned that when this matter was called out at the first hearing, learned advocate Mr. Majmudar was asked specifically about fulfilment of the pre-condition and he had taken time to seek instruction.