2007 (3) TMI 434 - AT - Customs

Summary

Issues:
Extension of period for issue of show cause notice without proper notice to importer.

Analysis:
The case involved an appeal regarding the extension of the period for issuing a show cause notice in a customs matter. The appellant had imported Retro-Reflective sheets, which were detained and seized due to undervaluation. The investigation was not completed within the stipulated time, leading to the need for an extension. The Commissioner of Customs extended the seizure period beyond six months. The show cause notice was issued later, and the extension order was upheld in the impugned order.

The appellant contended that the extension order was not issued to them before the expiry of the initial six-month period, as required by legal precedents. Citing the judgment in the case of I.J. Rao v. Bibhuti Bhushan Bagh, it was argued that notice for extension should precede the expiry of the retention period. The Tribunal's decision in B.R. Enterprises v. CC, New Delhi was also relied upon to support this argument.

The Departmental Representative (DR) supported the impugned order, emphasizing that a personal hearing was granted, and the show cause notice was eventually issued. The DR argued that the notice served its purpose of informing the importer about the extension necessity. The DR highlighted that the show cause notice was issued in December, and the goods were confiscated later, justifying the extension.

Upon careful consideration, the Tribunal found merit in the appellant's argument that the extension order should have been issued before the expiry of the initial six-month period. Referring to the Supreme Court decision in I.J. Rao case, it was noted that the importer should have been served notice before the six-month period lapsed. The Tribunal held that the absence of notice to the importer before the expiry rendered the impugned order unsustainable. Consequently, the Tribunal set aside the impugned order upholding the extension and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal ruled that the extension order for issuing the show cause notice was invalid due to the lack of timely notice to the importer. The judgment emphasized the importance of adhering to procedural requirements, especially regarding the issuance of extension orders within the prescribed time limits to ensure fairness and compliance with legal principles in customs matters.