Oder date – 04 August 2022

Facts –

• The Petitioner, Rachana Garments Pvt. Ltd. is engaged in the business of imports and exports. 
• They received a show cause notice dated 27/06/1997 issued by Commissioner of Customs alleging that quantities of Poly Filament Yarn (PFY) were inflated in the export promotion copies of the Shipping Bills. It demanded duty with interest on imports of PFY and other items along with fines and penalties.
• The proceedings went on for over 20 years not reaching a conclusion, at this point the petitioners filed this petition. 

Issue –

• Whether show cause notices issued but pending for long period be sustained?

Order –

• The Court observed that the principle of natural justice is violated in prolonging the proceeding based on a show cause notice issued 24 years ago. Relying on Hindustan Lever Limited V/ s. Union of India, 2011 the court reiterated that where show cause notices were issued but adjudicating order has not been passed for a long period, such show cause notices cannot be kept pending. Such delayed adjudication wholly attributable to the revenue would be in contravention of procedural fairness and violates the principles of natural justice.
• The court quashed the impugned show cause notice and directed to refund the causeless payment made by petitioners with accumulated interest within eight weeks of the receipt of certified copy of this order.