2017 (3) TMI 1595 - AT - Customs

Validity of SCN - Detention of goods - overvaluation - main grievance of the appellant is that when the SCN under Section 124 of the Customs Act was issued on 23-8-2012, there was no valid order of extension passed in terms of Section 110(2) of the Customs Act inasmuch as the same was already set aside by the Tribunal - Held that - the said section provides for extension for issuance of SCN u/s 124 within a period of six months from the date of seizure of the goods - Admittedly, when the SCN in terms of Section 124 was issued on 23-8-2012 there was no valid order of extension inasmuch as the same was set aside by the Tribunal on 19-6-2012. The subsequent extension order was passed belatedly on 18-12-2012, and by that time the show cause notice had already been issued on 23-8-2012. As such it can be safely concluded that the SCN having been issued on 23-8-2012 was beyond the period of six months from the date of seizure. The adjudication proceedings shall continue in terms of the SCN dated 23-8-2012 - the authorities are directed to return the seized goods to the appellant - appeal disposed off.

Summary

Issues:
Extension of time for issuance of show cause notice under Section 124 of the Customs Act.

Analysis:
The case involved the detention and seizure of shipping bills for export of fabrics by Customs Officers on allegations of overvaluation. The show cause notice under Section 124 of the Customs Act was not issued within the statutory six-month period, leading to a notice under Section 110(2) proposing an extension up to a specified date. The Commissioner adjudicated this notice, extending the period for issuance of the regular show cause notice under Section 124 by six months. However, the order was challenged before the Tribunal, which remanded the matter to the Commissioner for fresh decision, emphasizing the principles of natural justice. The Commissioner, in response, observed that the show cause notice had already been issued, and the extension related back to the initial extension order date.

The appellant contested that at the time of issuing the show cause notice, there was no valid extension order in place, as the Tribunal had set aside the previous extension order. They argued that the subsequent extension order was passed after the one-year period from the seizure date, exceeding the statutory limit. The Commissioner's decision to extend the period beyond one year from the seizure date was challenged by the appellant.

The Tribunal noted the provisions of Section 110(2), which allow for a six-month extension for issuing the show cause notice under Section 124 from the date of seizure. It was observed that the show cause notice issued was beyond the six-month period from the seizure date, as there was no valid extension order at the time of issuance. The Tribunal concluded that the belated extension order did not rectify the initial delay in issuing the show cause notice within the stipulated timeframe.

The appellant agreed that the belated show cause notice could be adjudicated by the Commissioner, with the potential outcome of returning the seized goods if found necessary. The Tribunal directed the authorities to return the seized goods to the appellant while instructing that the adjudication proceedings continue based on the show cause notice issued on 23-8-2012. The appeals were disposed of with these directions, emphasizing the need for adherence to statutory timelines and due process in customs proceedings.