The battle between Megaupload and the U.S. Government continues unabated. Megaupload's legal team has submitted a rebuttal to the Government's claims that Megaupload can be brought to justice in the U.S. They accuse the Department of Justice of making up its own rules to keep the criminal proceedings alive. The entire case should be dismissed instead, Megaupload's legal team argues.

Earlier this month Megaupload asked the court to dismiss its case because U.S. law doesn’t permit criminal proceedings against foreign companies.

The issue has become crucial in the ongoing Megaupload proceedings, as it may lead to a premature dismissal of the case.

According to “Rule 4″ of criminal procedure the authorities have to serve a company at an address in the United States. However, since Megaupload is a Hong Kong company, this was and is impossible.

However, the Government disagrees and in a filing last Friday asked the court to deny Megaupload’s motion. The Government claims that the federal rules shouldn’t be interpreted so narrowly. A company should only be served on a U.S. address if they have one, they argued.

The Government further claimed that because Megaupload was doing business in the U.S., there is no requirement to mail the summons to the company. Finally, if the court does decide that Megaupload has to be served, the Government says it could send it to an address of their choosing, such as the office of rapper and former Megaupload employee Swizz Beatz.

Responding to the Government’s claims, Megaupload’s legal team has now filed a rebuttal.

According to Megaupload none of the arguments presented by the Government are supported by case law. Instead of presenting cases that prove a legal precedent, the Government is rewriting Rule 4, Megaupload’s lawyers argue.

“None of the Government’s arguments squares with the plain language of the Rule or with any known precedent construing it. Each should be dismissed, along with the indictment against Megaupload,” they write.

The filing step-by-step refutes the Government’s attempts to amend the rules. Megaupload’s lawyers see no valid argument why the company can be brought to justice in the U.S., and they ask for a dismissal instead.

Only by dismissing the case can the court protect Megaupload’s due process rights, which are clearly at stake here according to the lawyers.

“It seems beyond dispute that (1) Megaupload has been deprived of its property, has had its reputation tarnished, and has had its business destroyed by the Government’s actions in this case; (2) to date, Megaupload has not been afforded a hearing or any other proceeding to contest these deprivations; and (3) absent service of process, this Court altogether lacks jurisdiction over the company.”

Talking to TorrentFreak, Megaupload lawyer Ira Rothken previously noted that the Department of Justice is intentionally trying to keep this “flawed criminal action” alive.

It is now up to the Court to decide who’s right and who’s wrong.