SONIA GOKANI, J.

1. The petitioners in the present petition have questioned the Show Cause Notice (‘the SCN’ hereinafter) issued on 09.02.2018 by the respondent no.2 on the ground that the same is without jurisdiction and the issuance of the same is with prejudiced and prejudged mind.

2. The brief facts leading to the present petition are as follows: -

2.1. The petitioners are having Import Export Code No.3003003976, 3009002041 and 3005001571 of M/s. SJS International, M/s. Greatway Overseas and M/s. V.V International respectively. It is engaged in the business of export of nut, bolts, washer, hand tools, etc. falling under Chapter Heading 7318, 8205, 3926, 3923 of the Customs Tariff Act, 1975. It is averred that the petitioners are exporting goods to the Gulf and Upper Gulf Countries after being registered with the office of the Director General Foreign Trade, Ludhiana.

2.2. The procedure which is conducted for the export under the Customs Act, 1961 (hereinafter referred to as “the Act”) is to file shipping bills under Section 15 of the Act which would be assessed by the proper officer under Section 17 of the Act and value and classification of the goods under drawback schedule in case of drawback shipping bills are checked once the goods are received in the docks/warehouse. The Customs Broker (CB) will present to the customs office checklist with endorsement of custodian and other declaration along with original documents. The goods will be examined as per the norms of examination as specified by the authority. For the exports under the duty drawback and export consignment to sensitive ports like Dubai, Sharjah, Singapore, Hong Kong etc. 25-50% of the consignment will be examined and if the same is found in order, the export order will be issued by the Docks Appraiser under Section 51 of the Act. The Government has declared various incentive schemes which included the duty drawback scheme under Sections 75 and 76 of the Act.

2.3. On 08.01.2015 the DRI on the basis of intelligence seized two containers of the petitioners on two grounds that the goods were over weighed and were not properly classified. According to them, the classification which is done under 7308 ought to have been under 7318 and hence, the goods were branded as mis-declared goods. The SCN was issued for the period from 01.01.2011 to 30.06.2015 to the petitioners.

2.4. For the provisional release of the seized goods, the authorities imposed stringent conditions which were challenged before the Customs Excise and Service Tax Appellate Tribunal (‘the CESTAT’ hereinafter) by the petitioners wherein the condition was relaxed and upon furnishing 100% value of the goods, the goods were released. They are finally assessed by the competent authority and duty drawback withheld was granted to the petitioners by order of this Court dated 13.08.2015.

2.5. It is averred by the petitioners that on two grounds of mis-declaration of weight and classification, the goods have been seized. The SCN has been issued on three grounds: mis-declaration (I) of weight, (ii) of classification, and (iii) of value of goods sought to be exported for the past consignments from 01.01.2011 to 30.06.2015 for which the duty drawback was availed.

2.6. It is alleged that the respondent no.2 adjudicated the SCN and passed the impugned order in breach of principle of natural justice therefore, the present petition is preferred with the following prayers: -

“(a) This Honourable Court be pleased to allow this petition;

(b) This Honourable Court be pleased to issue a writ of mandamus or certiorari or in the nature of mandamus or certiorari or any other appropriate writ, order or direction, quashing and setting aside the notice dated 09- 02-2018 and declare the same to be null and void;

(c) This Honourable Court be pleased to issue a writ of mandamus or certiorari or in the nature of mandamus or certiorari or any other appropriate writ, order or direction, quashing and setting aside the order in original dated 26 th / 27 th September 2019 and declare the same to be null and void;

(d) Pending the admission and final disposal of the petition, this Honourable Court be pleased to stay the execution and implementation of the notice at Annexure A to the petition;

(e) Pending the admission and final disposal of the petition, this Honourable Court be pleased to stay the execution and implementation of the order in original at Annexure B to this petition;

(f) This Hon’ble Court be pleased to grant an ad-interim relief in terms of para (d) and para (e);

(g) To pass such other and further orders as are necessary in the interest of justice.”

3. On issuance of notice respondent No.2 appeared and filed affidavit-in-reply. The Deputy Commissioner (SIIB), Customs House, Mundra has denied all averments unless specifically admitted.

3.1. According to the respondent No.2, the SCN is issued by the Additional Commissioner of Customs, Customs Commissionerate, Mundra as the impugned goods were exported from the Mundra Port vide various shipping bills filed with Mundra Customs House, therefore, it comes under the jurisdiction of the office of the Principal Commissioner of Customs, Mundra and hence, the SCN is issued by the Additional Commissioner of Custom who is the proper officer as per the monetary limit fixed by Central Board of Indirect Taxes and Customs, since the cause of action has arisen in the territorial jurisdiction of the Commissionerate. According to the respondents, as per the Madras High Court decision rendered in case of K.P. ABDUL MAJEED VS. COLLECTOR OF CUSTOMS & CENTRAL EXCISE, COCHIN, reported in [1995 (80) E.L.T. 35 (MADRAS)] the jurisdictional Commissioner has investigated and adjudicated the matter. The petitioners have not given any reason as to why the SCN and Order-in-Original are without jurisdiction.

3.2. It is further contended that the Additional Commissioner of Customs has rightly issued and adjudicated the SCN which was within his powers. It is also contended further that Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995 (‘the Drawback Rules’ hereinafter) empowers the department to recover the erroneous payment of drawback without any time limit and it can initiate the recovery proceedings under Section 142 of the Act.

3.3. In the era of self-assessment, the department relied on the information provided by the exporter/customs broker in the shipping bills, invoices, packing list, etc. The matter under consideration is an outcome of the investigation which has been thoroughly carried out by the investigating agency and the goods were found to be misdeclared in terms of quantity, value and they were mis-classified by the adjudicating authority. It is reflective that the petitioners misunderstood the concept of self-assessment and therefore, they were reassessed by the adjudicating authority.

3.4. It is further contended that since the goods were mis-classified and misdeclared in terms of quantity and value, they were confiscated in terms of 113(i) and 113(ii) of the Act read with Section 11 of the Foreign Trade (Development & Regulation) Act, 1962. Though the goods have been already exported, they were liable for confiscation. It is a settled position of law, according to the respondents, that Section 113 of the Act can be made applicable to the goods which are already exported.

3.5. It is further the say of the respondent that the further investigation was carried out and the search of the premise of M/s.SJS International, Jalandhar under the Panchnama dated 20.10.2015 was conducted. They were examined at the office of DRI, Ludhiana. The parallel invoices to overvalue the shipping bills to avail the undue drawback fraudulently by producing the department of customs at the time of export, deserved to be handled strictly.

3.6. It is also the say of the respondent that the decision of NEW PENSLA INDUSTRIES VS. COMMISSIONER OF CUSTOMS relied upon by the petitioners would not apply in the instant case, where the issue is related to the query raised by the drawback section regarding classification after partially sanctioning the drawback. The High Court rejected the department’s query and allowed the drawback however, in this case, the issue is completely different. According to the respondents, the shipping bills of the exporters are self-assessed. In the past exports, the goods have been wrongly classified under CTH 8205 7000, 7325 9910, 7318 1900 and after the DRI booked the case, the exporters started mentioning the classification under CTH 7308 4000 which was upheld by the adjudicating authority. In the past shipping bills of the exporters, the drawback under CTH 8205 7000, 7325 9910, 7318 1900 are more than the drawback under CTH 7308 4000 and that is the reason why the exporters have resorted to misclassification. After DRI investigation, it changed to CTH 7308 4000 on its own and that will not help the cause of the petitioners.

3.7. The Commissioner’s (Appeal) order dated 24.11.2015 also would not apply in the case of the present petitioners where the classification was rejected by the lower authority for want of end use certificate. Whereas in the instant case, the classification has been accepted by the exporters on their own after DRI investigation. The parallel invoices have also been found in the premises during the search.

3.8. It is also contended that the petitioners can certainly avail the alternative remedy under Section 128 of the Act for appeal before the Commissioner (Appeal) against the order passed by the adjudicating authority and since the petitioners have been engaged in export of the goods by mis-declaring the value, quality and the classification, no interference is desired.

4. Affidavit-in-rejoinder has been filed by the petitioner No.2 denying all the contentions.

5. This Court has heard extensively the learned advocates on both the sides and also have examined the pleadings and supporting materials carefully. The petitioners have approached this Court on the ground that the respondent has no jurisdiction to initiate the actions and has exceeded its jurisdiction vested in him by issuing the SCN beyond a certain period & also in respect of exported goods. The issue of classification of goods has been attempted to be opened by the respondent, assessed by the proper officer under the law. The petitioners are engaged in the business of export of nut, bolts, washer, hand, etc. falling under Chapter Heading 7318, 8205, 3926, 3923 of the Customs Tariff Act, 1975. According to the petitioners, the legal position is that the goods are to be classified as per the description and not as per use of the material and thus, if the nut is to be classified as the end use of the nut, the classification would be done accordingly. It is further the case of the petitioners that this is the view the Courts have taken.

6. It is also the grievance of the petitioners that the notices have been issued to the petitioners on the ground that they have misclassified the goods and the same are required to be reclassified. It is reiteratively the say of the petitioners that the respondent has acted beyond the jurisdiction vested in it. For the assessment of the goods and the valuation of the goods as well, the procedure is prescribed. At the stage of self assessment, the proper officer assessing the goods would either accept the assessment or would not. There are valuation rules for assessing the goods which are under valued and once finally assessed, the goods are ready for export. The SCN had been issued on the ground of under valuation after a lapse of long time, which is questioned by the petitioners that the same is impermissible when the goods are already exported. The exporter had already received the consideration for the exported goods as per the value declared before the Assessing Officer and that has to be treated as final and such valuation is not required to be disputed.

6.1. According to the petitioners, the value of the goods exported have been realised and the note from the Bank is also received by exporter. On the strength of the weight, the value has been calculated and according to the petitioners, once the value has attained the finality, it cannot be disputed. It is even not for the competent and proper officer while assessing the goods, which has attained finality, to once again revisit the same.

7. Taking firstly the aspect of jurisdiction as contended before this Court, the SCN has been issued on 09.02.2018 by the Additional Commissioner of Customs, Customs Commissionerate, Mundra. Since the goods were exported from Mundra Port vide various shipping bills filed with Mundra Customs House, therefore, the jurisdiction would come of the office of the Principal Commissioner of Customs, Mundra and the notices have been issued by the proper officer as per the monetary limit fixed by Central Board of Indirect Taxes and Customs. The reliance is placed on the decision of the Madras High Court rendered in case of K.P. ABDUL MAJEED VS. COLLECTOR OF CUSTOMS & CENTRAL EXCISE, COCHIN [1995 (80) E.L.T. 35 (MADRAS)] wherein it is held that if a cause of action has arisen in the territorial jurisdiction of the Commissionerate, the jurisdictional Commissioner can investigate and adjudicate the matter.

7.1. So far as the Rule 16 of the Drawback Rules is concerned, it provides the recovery of payment of drawback and it also permits the initiation of recovery proceedings under Section 142 of the Act.

7.2. Here, the challenge essentially is of having initiated the proceedings in relation to the goods, which have already been exported and there were serious questions raised of misdeclaration in terms of quality, value and wrong classification. This confiscation has been made in terms of Sections 113 (1) and Section 113(2) of the Act read with Section 11 of the Foreign Trade (Development and Regulation) Act, 1962.

7.3. Under the shipping bills No.6982039 dated 01.01.2015 and 6982047 dated 01.01.2015, some of the goods were allegedly misdeclared in terms of quantity/ weight and the classification of the goods. The search of the premise of M/s.SJS International, Jalandhar under the Panchnama dated 20.10.2015 had been conducted and the electronic devices and documents were retrieved from the office of the petitioner. The DRI, Ludhiana examined the same and also recorded the statement of Mr.S.K.Chaudhary. The Order-in-Original indicated that there were parallel invoices to overvalue the shipping bills for availing drawback fraudulently by producing the overvalued invoices to the department of Customs at the time of export.

7.4. Apt would be to refer to Rule 16 of the Drawback Rules, at this stage, which speaks of repayment of erroneous or excess payment of drawback and interest.

“Rule 16. Repayment of erroneous or excess payment of drawback and interest. - Where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962.”

7.5. It is quite clear from the said Rule that any amount of drawback and interest when paid erroneously or is paid in excess of the entitlement of the claimant, on demand by a proper officer of the Customs, the claimant is required to repay the amount paid erroneously or in excess. Rule 16 of the Drawback Rules provides for recovery of an amount of drawback and interest paid erroneously or in excess of what the claimant is entitled to, on demand by a proper officer of the customs the same shall need to be repaid. And, where he fails to repay the amount, it is permitted to be recovered in the manner provided under Sub-section (1) of Section 142 of the Act. It is quite clear from Rule 16 of the Drawback Rules that what all it provides for is the recovery of excess drawback paid erroneously, but choses not to prescribe the time limit. The question which has come up for consideration as to whether in absence of any period of limitation provided under Rule 16 of the Drawback Rules, any reasonable time period could be read into the said Rule. It also provides for statutory mechanism of recovery under Section 142 of the Act.

8. This Court in Special Civil Application No.2039 of 2004 and allied matters needed to consider the very issue where the petitioners before the Court had challenged the order passed by the Revisional Authority which had held that the drawback paid erroneously to the petitioners was liable to be recovered. After a period of more than three years since the disbursement of the Drawback, SCNs came to be issued to each of the petitioners proposing to recover from them the differential amount of drawback erroneously paid to them under section 142 of the Customs Act read with Rule 16 of the Drawback Rules on the ground that the drawback should have been paid at the rate of 17% by taking into account the maximum limit of Rs.62 per kg. The adjudicating authority had held that it was inherent in the scheme that the drawback could not exceed the maximum of Rs.62 per kg fixed for a particular serial number.

9. However, on limitation, it was held that there is no provision prescribing any specific time for issuance of SCN for recovery of excess drawback paid by the Department under Rule 16 of the Drawback Rules.

9.1. This was carried in appeal before the Commissioner (Appeals), who by a common order dated 29.6.2000, allowed the appeals and thereafter, the revenue approached the revisional authority in the Government of India, which also allowed the same. On the question of time limit for recovery of drawback, the revisional authority also held that the Drawback Rules are a self contained set of Rules made under section 75 of the Act and there is no time limit for issuance of demand notice for recovery of drawback paid erroneously or in excess under Rule 16 of the Drawback Rules.

9.2. The matter came up before this Court, where it firstly directed the review before the Revisional Authority and thereafter once again, when the petitioner approached before this Court, the Court held thus:

“16. In the light of the facts and contentions noted hereinabove, the sole question that arises for consideration in this group of petitions is as to whether the concept of reasonable period is required to be read into rule 16 of the Drawback Rules which does not prescribed any period of limitation for recovery of drawback erroneously paid.

17. As noticed earlier, the drawback claims in all these petitions relate to the period between December 1995 to 1996, in relation to which, show cause notices came to be issued in February 2000. Thus, in all the cases, drawback claims had been processed and cleared before issuance of the clarification vide letter dated 20th September 1996 by the Commissioner (Drawback) with the approval of the Chairman of CBEC. On a close reading of the said letter, it is apparent that the same envisages finalization of pending drawback clai s in the light of the clarification issued therein, namely, that the maximum ceiling has to be inferred even in cases where goods are not exported under AR4 and/or exporter is unable to furnish the certificate as required under condition (b) of the Note to SS No.5404 (1) in respect of which drawback is payable at the rate of 17% of the FOB value. Thus, while issuing the initial clarification on 20th September 1996, the instructions issued by the CBEC were to the effect that the same should be applicable only to pending drawback claims. Subsequently, by the clarification issued vide letter dated 19th August 1999, CBEC clarified that the earlier clarification of 20th September 1996 was operative from the date of issuance of the original notification and was not only prospective. It appears that it is only pursuant to the subsequent letter dated 19th August 1999, that the show cause notices have been issued in February 2000. Thus, though the Customs Authorities were well aware about the clarification in respect of the drawback paid on goods falling under condition (c) of the Note below subserial No.5404 (1) of the Schedule, no action was taken at the relevant time to recover the drawback paid to the petitioner beyond the ceiling limit provided thereunder. It is only in February 2000, after a period of more than three years that by issuance of show cause notices, differential amount of drawback was sought to be recovered from the petitioners. The revisional authority in the earlier order dated 28th June, 2002 has held that the Drawback Rules do not provide for any time limit and as such there is no time limit for issue of demand notice for recovery of drawback paid erroneously or in excess under rule 16 of the Rules.

18. Rule 16 of the Drawback Rules provides that where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs, repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub section (1) of section 142 of the Customs Act, 1962. Thus, apparently rule 16 of the Rules does not provide for any time limit for making recovery of excess drawback paid erroneously. The question, therefore, is when rule 16 does not prescribe any period of limitation, whether action can be taken thereunder after any length of time, or whether the concept of reasonable period has to be read into it. In this regard, it is by now well settled by the Supreme Court in a catena of decisions that if the statute does not prescribe any period of limitation, the power thereunder has to be exercised within a reasonable time. What would be a reasonable period would, of course, depend upon the facts of each case.

19. In Government of India v. Citedal Fine Pharmaceuticals, Madras (supra), the Supreme Court has, in the context of rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956, which did not provide for any period of limitation, held thus:

“6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised. it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case.”

20. In Collector of Central Excise, Jaipur v. M/s.Raghuvar (India) Ltd. (supra), the Supreme Court held that any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for the courts to import any specific period of limitation by implication, where there is really none, though courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period.

21. In Torrent Laboratories Pvt. Ltd v. Union of India (supra), a Division Bench of this Court in the context of rule 57-I of the Central Excise Rules, 1944 held that in absence of any provision with regard to specific period of limitation, reasonable period of limitation has to be read into the rule.

22. Thus, it is a settled legal proposition that where a statutory provision does not prescribe any period of limitation for exercise of power thereunder, a reasonable period has to be read therein. As to what is a reasonable period would depend upon the facts of each case.

23. Examining the facts of the present cases in the light of the aforesaid legal position, in all these cases, drawback had been paid to the petitioners between December 1995 and August 1996. Thereafter, despite a clarification having been issued as regards the interpretation of condition (c) of the Note under SS No.5404(1)(i) of the Drawback Schedule, no action was taken by the concerned authorities at the relevant time. It is only after a period of more than three years that show cause notices came to be issued to the petitioners seeking to recover the differential amount of drawback erroneously paid to them. Judging the period of delay from the armchair of a reasonable man, under no circumstances can the period of more than three years be termed to be a reasonable period for recovery of the amount erroneously paid. As held by the Supreme Court in the case of Collector of Central Excise, Jaipur v. M/s.Raghuvar (India) Ltd. (supra), where no period of limitation is prescribed, the courts may always hold that any such exercise of powers which has the effect of disturbing the rights of citizen should be exercised within a reasonable period of time. In the present case, the drawback had been paid more than three years prior to the issuance of the show cause notices, and despite the fact that clarification in respect of condition (c) of the Note under SS No.5404(1)(i) of the Schedule had been issued way back in the year 1996, no efforts were made to recover the drawback paid to the petitioners at the relevant time. Thus, the petitioners were entitled to form a belief that the matter has attained finality and arrange their finances accordingly. Now, when after a period of more than three years has elapsed, if the respondents seek to recover the amount of drawback paid, it cannot be gainsaid that such exercise of powers would have the effect of disturbing their rights. Under the circumstances, reading in the concept of reasonable period in rule 16 of the Rules, this court is of the view that the show cause notices in question were clearly time barred.

24. Insofar as the decision of this court in the case of Dadri Inorganics Pvt. Ltd v. Commissioner of Customs (supra) on which reliance has been placed by the learned counsel for the respondents is concerned, a perusal of the said decision indicates that the said case fell within the ambit of willful misstatement or suppression of fact as envisaged under the proviso to section 28 of the Customs Act. It is, therefore, in the light of the peculiar facts of the said case that the court had held that the contention that the extended period of limitation could not be invoked was misconceived. The decision cannot be said to be laying down any absolute proposition of law to the effect that since rule 16 of the Drawback Rules does not provide for any limitation for recovery of amount of drawback erroneously paid, such powers can be exercised at any point of time, even beyond a reasonable period.

25. As regards the submission advanced by the learned counsel for the respondent that since in the review application, the petitioners had not raised the contention as regards limitation, the petitioners are now prohibited from raising the same in these petitions, it may be noted that in the earlier order dated 28 th June 2002, passed by the Government of India, the issue on merits, namely, applicability or otherwise of the maximum ceiling to the goods falling under condition (c) of the Note under SS No.5404(1)(i) of the Schedule had not been decided inasmuch as in para 12 of the said order, the revisional authority observed that the issues were already decided by the Government in the interim order. The sole issue that was decided by the revisional authority in the said order was on the question of time limit for recovery of drawback. When the petitioners challenged the said decision before this court, the petitions were withdrawn with a view to file review applications before the revisional authority on the merits of the applicability of the maximum ceiling of Rs.62/- in cases falling under condition (c) of the Note under SS No.5404(1)(i) of the Drawback Schedule, on the ground that the revisional authority had not considered the said aspect and had laid emphasis on the limitation aspect of the matter. Thus, it is apparent that since in the earlier order, the revisional authority had considered the aspect of limitation only, review applications came to be filed before the revisional authority inviting a decision on merits as regards the applicability of the maximum ceiling to the cases of the petitioners. Viewed in the aforesaid context, the contention that as the question of limitation had not been raised before the revisional authority in the review applications, the petitioners are debarred from raising such contention before this court in these petitions deserves to be stated only to be rejected.

26. In the light of the aforesaid discussion, in the opinion of this court, though rule 16 of the Drawback Rules does not provide for any period of limitation, a reasonable period has to be read into the said rule. As observed hereinabove, in the facts of the present case, the show cause notices which have been issued after a period of more than three years from the date when the drawback came to be paid to the petitioners, cannot by any stretch of imagination be said to have been issued within a reasonable period of time. Under the circumstances, the show cause notices have to be held to be bad on the ground of being time barred. Once the show cause notices are held to be invalid, the very substratum of all the orders passed pursuant thereto, including the impugned orders would fall, rendering the same unsustainable.”

9.3. This decision has also been followed in case of PADMINI EXPORTS & 1 vs UNION OF INDIA & 2 in Special Civil Application No.17812 of 2003.

9.4. It is apt to note that these are binding precedents from 2012. The authority concerned ought to have followed the same when the same have attained finality.

9.5. In Special Civil Application No.14917 of 2013 to 14921 of 2013 this Court (Coram: Justice M.R.Shah, as His Lordship then was & Justice Sonia Gokani) in case of E I DUPONT INDIA PRIVATE LIMITED & 1 vs UNION OF INDIA & 3. had noticed the case of Commissioner of Central Excise and Customs vs. NBM Industries, reported in 2013(29) STR (208) Gujarat wherein it had been held that on inputs used in manufacturing of goods cleared by DTA units to 100% Export Oriented Unit (EOU), refund of CENVAT credit is available and the same cannot be denied on the ground that the case was of deemed export. It was insisted that the refund would be granted only in case of physical export. This Court disapproved non following of a binding decision and despite the direction of this Court, the respondent had rejected the refund claims of the claimant on the ground that the decision of NBM Industries (supra) is the case of another assessee and not in the case of claimant and each one must fight its own battle and must succeed or fail in such proceedings. It also had relied on the decision of the Madras High Court reported in 2007(211) ELT 23 (Madras) which was against the assessee.

9.6. This Court taking note of various decisions had directed that the action of the rejection of refund claim cannot be sustained and deserve to be quashed and set aside. While parting, the Court in very strong words disapproved the arbitrary act on the part of the lower adjudicating authority and in ignoring the binding precedents. Apt would be to refer to those words:

“[6.0] In view of the above and for the reasons stated above and the decision of this Court in the case of NBM Industries (Supra), the impugned orders passed by the respondent No.4 rejecting the refund claims of the petitioner cannot be sustained and they deserve to be quashed and set aside and are accordingly quashed and set aside and the respondents – adjudicating authorities are hereby directed to sanction the respective refund claims of the claimant after following the law laid down by this Court in the case of NBM Industries (Supra) and pass fresh orders within a period of two months from the date of the receipt of the present order and to make the actual payment within a period of four weeks thereafter and also grant consequential reliefs which may be available to the petitioners under the relevant provision of the rules more particularly Rule 5 of the Rules.

[6.1] Before parting with the present order, we are constrained to strongly disapprove such arbitrary act on the part of the lower adjudicating authority and/or lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Time and again the Hon’ble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Still it appears that message has not reached the concerned authorities. In the recent decision in the case of Claris Lifesciences Ltd. (Supra) in para 26 this Court has observed as under:

“26. Despite such clear and specific directions and authoritative pronouncements, act of issuance of show cause notice by the Deputy Commissioner is wholly impermissible and unpalatable and deserves to be quashed and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allowed. Both the show cause notices dated 21.8.2012 and 22.1.2013 are quashed and struck down.”

It appears that still the message has not reached the concerned authorities in following the binding decisions of the higher appellate authorities and/or courts solely on the ground that the same is in the case of another assessee. Such a conduct is also required to be viewed from another angle. This would not only amount to disregarding the direction of the court rendered in earlier petitions but would also lead to multiplicity of proceedings. When the courts are overburdened and are accused of arrears, it is the duty of the concerned authorities to avoid multiplicity of proceedings and lessen the burden of the courts. Being a part of the justice delivery system. All efforts should be made by the authorities/quasi judicial authorities and judicial authorities to see that there is no multiplicity of proceedings and to pass the orders considering the binding decisions. It would also avoid unnecessary harassment to the parties as well as the unnecessary expenditure.

[6.2] As observed hereinabove despite clear and unequivocal message by the pronouncement of the decisions by the Hon’ble Supreme Court as well as this Court, the message has not reached to the concerned authorities, we direct respondent No.2 – Central Board Excise and Customs, New Delhi to issue a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the Hon’ble Supreme Court in various decisions referred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again.”

10. In the instant case, the grievance on the part of the petitioners is that the Order-in-Original does not recognize the issue of limitation although the same being the settled law. Here the petitioners have exported the articles from Mundra Port and had claimed that drawback and benefit under the Focus Product Scheme (FPS). The allegation has been that it had indulged in misuse of drawback scheme and FPS and other exports incentives by way of making export of scaffolding items falling under CTH No.7308 by placing under CTH Nos.731816000, 39235010, 39269099 and 82057000 with the allegation of export of less quantity of goods than what was declared and over valuing of the export products. After the proper officer had allowed the export to be made, the DRI has initiated the action.

11. Admittedly, the export of goods covered under shipping Bill Nos.6982047 and 6982039 both dated 01.01.2015 and export goods covered under shipping Bill Nos.6998694 and 6997757 both dated 02.01.2015 had been seized carrying out the panchnama dated 08.01.2015. The DRI had allegedly noticed the shortage of 3205 Kg and 2990 Kg than what had been declared in the shipping bills. The goods were detained pending the inquiry and were handed over for safe custody. After the seizure of the goods as per Section 110 of the Customs Act, the DRI, Ahmedabad wrote a letter to the Joint/Additional Commissioner of Customs for giving ‘No Objection’ for provisional release of seized goods.

11.1. On execution of bond of 100% FOB value of goods along with 25% security in the form of Bank Guarantee, the same had been permitted.

11.2. The petitioners had challenged this provisional release by approaching the CESTAT, which vide order dated 01.05.2015 released the seized goods on furnishing the bond of 100% value and accordingly, goods were provisionally released for the exports by the custom authority.

12. This Court notices the detailed Order-in-Original adjudicating the SCN against which there is already a channel of appeal provided and thereafter, if the party is still aggrieved, the revisional authority can also be approached by the litigating party. However, here previously SCN of dated 12.01.2016 in relation to the seized goods was already issued and yet, another SCN is issued, the revenue has not challenged what has been held favoring the petitioner and the petitioner has challenged it on the ground of breach of principles of natural justice as well as on substantive issues.

13. The petitioner has approached this Court as the actions have been taken of issuance of the SCN in relation to the search made on 10.01.2015, the SCN has been issued on 09.02.2018. It is thus clear that for the export which had been made in the years 2011 to 2015 and for the shipping Bills of 01.01.2015 for which the duty drawback had been given to the petitioner in the year 2016, this action has been initiated before expiry of a period of three years so far as some bills are concerned. As held by this Court in case of PRATIBHA SYNTEX LIMITED vs. UNION OF INDIA & OTHERS, Rule 16 of the Drawback Rules though does not provide for the period of limitation, the reasonable period of limitation has to be read into the same and the SCN issued before expiry of a period of three years from the date of payment of the drawback to the petitioner cannot provide a reason for the Court to hold that the same as time barred.

14. The petitioners have shown the procedure for export of goods. It is a detailed procedure to urge that the petitioners have exported the goods following the procedure upon the export permitted by the proper officer and the final shipping bills being generated, the petitioners were entitled to duty drawback as the shipping bills were filed through EDI system. Under the EDI system, once the final shipping bill is generated, the same becomes the final claim for the duty drawback according to the petitioner and the same needs to be paid within three working days as per the Circular No.25 of 2000 of the department.

15. We note that the show cause notice is issued by the authority for the shipping bills from the years 2011 to 2015. The list of shipping bills has been given & barring a very few shipping bills which have been submitted here duty drawback has been paid to the petitioner for numerous shipping bills from 2011 to 2014 long before and therefore, any show cause notice issued after a period of three years from the date when drawback came to be paid, cannot be sustained. This is also one serious breach deserving indulgence. In relation to most of the shipping bills, duty drawbacks have been paid where this decision would come to the rescue of the petitioner. And, where completion of 3 years is not happening for those payments of duty drawbacks made in the year 2016 there appears to be no breach of required time period. Assuming that for the some of the shipping bills for which the show cause notice has been issued, the decision of this Court for limitation will apply as the payment is of 2016 and the SCN is of 2018, period prescribed for payment is three days on presentation and delay on the part of the respondent also cannot take away the right of party.

16. As held above in case of those shipping bills as the show cause notice essentially cannot be issued beyond the period of three years of payment of the duty drawback, and that being a settled legal position, if not regarded, this Court needs to interfere. Again, the proper officer who assesses the shipping bills will be in a position to reopen the same provided that there is such a stage of reopening the shipping bill filed once are self assessed, that would attain finality upon the proper officer clearing the same. Had there been any discrepancy, the proper officer would not consider the self assessment final and would obviously assess the shipping bill before finalizing.

17. In the instant case, the shipping bills had been finally assessed and the assessment had attained finality. The aggrieved party having any issue on the classification would need to approach the appellate authority instead of reopening the assessment by issuing the show cause notice. The appeal appears to have become time barred as averred by the petitioners, the show cause notice is on account of the misclassification.

18. However, the Court needs to regard that the core issue raised in SCN is of classification which is concluded and no challenge is made by the revenue. It has also questioned this after the export is already made and, even when the statutory provision permits the same, settled legal position would preclude such challenge when made beyond a specific time period. Additional reason is of the time stipulated for clearing the shipping bill which is of three days (3) and any late clearance also cannot furnish the reason to permit issuance of the SCN calculating from the date of payment of duty drawback. Even if, this angle is not dilated and left to the parties to argue before the concerned authority, at the best, for those bills where payment of duty drawback is within 3 years of the issuance of SCN, the adjudication can be permitted. This has not been at all considered in the order in original. Again, with no challenge having been made by the department to the decision of the proper officer where many of the aspects of the petitioners have been accepted and with non consideration of the decision of this Court as discussed at length, interference would be necessary.

19. The initiation of the action on the part of the DRI on an intelligence of is severally questioned when the proper officer has already held in favour of the assessee classifying the item of export under a different head. Reliance is placed also upon the case of M/S.CANNON INDIA PRIVATE LIMITED V/S. COMMISSIONER OF CUSTOMS, reported in 2021 AIR 1699 to urge that the DRI has no powers to initiate action against the petitioner. This surely is an additional and potent ground for the Court to regard the binding decision of the Apex Court and hold in favour of the petitioner.

19.1. Even without touching the ratio laid down in case of M/s.Cannon India Private Limited (supra) as this decision came recently, on non consideration of the ground of limitation also, interference is desirable.

20. Resultantly, this petition is allowed partly. The action of the respondent authority of issuance of the SCN dated 09.02.2018 is interfered with. The SCN in the present form is quashed and set aside with all consequential actions with a clarification that for the shipping bills not covered by the decision of PRATIBHA SYNTEX LIMITED (supra), the authority shall be permitted to proceed if allowed otherwise under the law.