Quoting Pink Floyd’s Lyrics Gujarat High Court Quashes A Decade Old Customs SCN [READ ORDER]

The Gujarat High Court while quashing a decade old customs Show Cause Notice (SCN) held that revival of the proceedings after an inordinate delay is contrary to the concept of speedy disposal of SCN, when proper reason for the delay is not provided.

The bench of Justice Bhargav D. Karia and Justice D.N.Ray quoted Pink Floyd’ lyrics in Time (The Dark Side of the Moon) which says that And then one day you find, Ten years have got behind you, No-one told you when to run You missed the starting gun ……”

The short issue that calls for determination by this Court is whether a show cause notice issued by the Customs Department, which has remained unadjudicated for a long period of time, in excess of ten years, should be quashed only on such ground?

The Petitioner is a registered company, inter alia engaged in the manufacture and export of dyes and chemicals. The Petitioner undertook the export of “Synthetic organic dyes Acid Black-210” under two shipping bills No from the Inland Container Depot (ICD) at Ahmedabad. The Petitioners availed the benefits of the Duty Entitlement Pass Book Scheme (DEPB).

A Search was carried out by the officers of the Directorate of Revenue Intelligence (DRI) on 15.09.2009, at the factory and the registered office premises of the Petitioners, suggesting that the said exports involved mis-declaration of the products. Samples were obtained by the DRI and sent for testing.

The Chemical Examiner, in his report dated 29.09.2009, mentioned that, even when these products are clearly black- coloured powder in the form of “synthetic organic dye acids”, the samples of one of the shipping bill No. 1393015, dated 14.09.2009 would be “Acid Black 234” and not “Acid Black 210” as declared by them. Also, it was stated that the other shipping bill No. 1393016, clearly contained “Acid Black 210”, as declared by the Petitioners.

Based on the investigation, the office of the DRI issued a Show Cause Notice dated 08.03.2010, stating that the Petitioners wrongfully availed the benefits under the DEPB Scheme and thus, proposed the confiscation of goods under the shipping bills.

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The Petitioners have deposited Rs.75,00,000 as a pre- deposit amount towards the protection of revenue interest, as directed by the DRI authorities.

DRI issued the second Show Cause Notice under Section 111(o) read with Section 28 of the Customs Act,1962, for the past exports of the product “Acid Black 210”, and suggested that, all such exports were based on mis-declaration and accordingly sought the recovery of the benefits availed. 

The demand for recovery of the entire DEPB availed for a period commencing from April 2005 to April 2010, i.e., Rs.1,23,31,774/-, with interest and penalties.

The petitioner submitted that the customs authorities have conducted parallel proceedings to the show cause notice issued by the Joint Director General of Foreign Trade, Ahmedabad in which by order dated 10.07.2013, the contentions of the petitioner have been substantially upheld and the show cause notice dated 13.04.2010 was adjudicated by imposing a token penalty of Rs.11,686/-. However, in spite of the same the Customs Authority, which had issued the impugned show cause notices dated 08.03.2010 and 03.11.2011 have not even adjudicated the same and therefore, today it is too late in the day to permit the Customs Authority to adjudicate the aforesaid SCNs. 

The court noted that the notice issued by the Joint Director General Foreign Trade, Ahmedabad is substantially similar to the impugned show cause notices issued by the Customs Authority . 

The court while allowing the petition held that 8. The impugned SCNs have remained pending for more than 15 years and 13 years respectively. Considering the aforesaid decisions, this Court has no hesitation in holding that due to an inordinately long lapse of time , the impugned show cause notices dated 08.03.2010 and 03.11.2011 can no longer remain pending for adjudication and must be quashed and set aside on that score alone.

Case Details

Case Title: Rohan Dyes And Intermediates Limited & Anr. Versus Union Of India & Ors.

Case No.: R/Special Civil Application No. 10826 Of 2020

Date:  07/03/2025

Counsel For Petitioner: Himanshi Patwa

Counsel For Respondent: Ankit Shah