M/S R.S. OVERSEAS v. COMMISSIONER OF CUSTOMS, ICD, TKD

1. This hearing has been done through hybrid mode.

2. The present petition has been filed under Article 226 of the Constitution of India, inter alia, challenging the impugned Order-in-Original dated 31st January, 2025 (hereinafter “impugned order”), which arises out of the Show Cause Notice dated 14th January, 2021 (hereinafter “the SCN”).

3. The submissions raised by the Petitioner is twofold: i) Firstly, that the SCN had been issued after five years and is hence not maintainable; ii) Secondly, that the adjudication has been delayed for a period of five years.

4. Mr. Sarkar, ld. Counsel for the Petitioner relies upon the decision in W.P. (C) 4831/2021 titled M/s. VOS Technologies India Pvt. Ltd. vs. The Principal Additional Director General & Anr., to argue that the delayed adjudication ought to result in the quashing of the SCN itself.

5. Mr. Naushad, ld. Senior Standing Counsel for the Department, on the other hand submits that in this case, the Petitioner had sought adjournments repeatedly and thereafter, the Adjudicating Authority has passed the impugned order. He further submits that the question of delayed adjudication has already been considered by this Court in Rajbir Singh v. Union of India, 2025:DHC:2257-DB, where the Court clearly observed that there is no period of limitation which has been prescribed under Rule 16 of the Customs Central Excise Duties and Service Tax Drawback Rules, 1995 (hereinafter “Duty Drawback Rules”).

6. The Court has considered the matter. At the outset, the Court notices that the aspect of delay would not apply in the present case as, after issuance of the SCN, repeated hearings have been given by the Adjudicating Authority to the parties. The impugned order records the number of hearings which have been granted as under:

7. A perusal of the above dates of hearings which were afforded to the Petitioner would show that beginning from 15th December, 2022 till 13th January, 2025, repeated hearings have been held by the Adjudicating Authority. On most of the occasions, the Petitioner did not appear before the Adjudicating Authority, however, repeated letters were sent seeking relied upon documents etc. Further, despite the number of hearings extended, the Petitioner did not choose to file the reply. Under these circumstances, delay cannot be attributed to the Department in this case.

8. Further, the Court in Rajbir Singh (supra) had considered the Rule 16 of the Duty Drawback Rules and the argument of limitation as raised by the Petitioner. The Court had held that there is no specific period of limitation prescribed under Rule 16 of the Duty Drawback Rules. The relevant portion of the said order reads as under:

9. Further, in Rajbir Singh (supra) the Court had followed the decision in Commissioner of Customs v. Sans Frontiers, 2023 SCC OnLine Del 7913, where in a similar fact situation, the Court had relegated the party to seek the appellate remedy. The relevant portion of the said judgment is set out below:

was made within a reasonable period from when the Revenue came to know of the fact that the firm had wrongly availed the drawback.

80. We do not consider it apposite to decide in the facts of the present case as to whether that the SCN dated August 24, 2015 was issued belatedly or not since the said issue had been decided in favour of the Revenue by the order passed by the Commissioner (Appeals), and has not been adjudicated upon by the revision authority having jurisdiction under section 129DD of the Customs Act.

81. In the peculiar facts of this case where the Revenue originally had not taken any objection on the appeal being heard by the learned CESTAT, and had also, following the order of the learned CESTAT, sanctioned refund of the drawback, the firm should not be left remediless.

82. We, therefore, grant an opportunity to the firm to prefer a revision, under section 129DD of the Customs Act, against the order dated May 14, 2018 passed by the Commissioner (Appeals).