2012 (5) TMI 530 - AT - Central Excise

Invocation of extended period of limitation - Whether or not there was sufficient cause for extending the period of issue of show cause notice as contemplated by the proviso to clause (2) of Section 110 of Customs Act, 1962 - Held that - Perusal of the show cause notice dated 28-2-2012 for extending of time of show cause notice would show reason given for the proposed extension of period of Show cause notice was that the data from the CPU seized from the factory of the appellant s firm could not be retrieved due to non-cooperation of appellant Shri Umesh Soni who despite of service of summon failed to appear on the pretext of some urgent work. Another reason to justify to extend the period of issue of show cause notice is that the investigation could not be completed due to non cooperation by the appellant. Infirmity in the impugned order which may call for interference by the Tribunal, particularly when, the learned Counsel for the appellant could not explain the source of confiscated goods, Indian currency recovered from the appellants in answer to our query. The fact, that the appellants have not come forward to explain the source of the seized goods and the Indian currency is clear indication of non cooperation by the appellant. In view of the above, it is prima facie evident that further investigation is required to verify whether or not seized goods and Indian currency are the result of clandestine removal of excisable goods by the appellant - Decided against assessee.

Summary

Issues:
Extension of period for issue of show cause notice under Section 110(2) of Customs Act, 1962 read with Section 112 of Central Excise Act.

Detailed Analysis:

1. Facts and Background:
- M/s. Hytech Earthmoving Engineers and its partners filed appeals against the order of the Commissioner of Central Excise & Customs extending the period for issuing a show cause notice regarding seized goods and Indian currency.
- Unaccounted stock of parts worth Rs. 1,06,26,669/- was seized along with Indian currency and other valuables during searches conducted at various premises.

2. Legal Provisions Involved:
- Section 124 of the Customs Act, 1962 mandates serving a notice before confiscation of goods or imposing penalties.
- Section 110(1) empowers seizure of goods on reasonable belief of liability to confiscation, with Section 110(2) providing for return if no show cause notice is served.
- Proviso to Section 110(2) allows the Commissioner to extend the period for issuing show cause notice by six months for sufficient cause.

3. Contentions of the Appellant:
- Appellant argued that the extension of the notice period was arbitrary and non-speaking, not addressing their submissions.
- Cited precedents to support their claim of lack of cooperation during investigation being unfounded.
- Contended that data from the seized computer was retrieved, and summoning customers for investigation was irrelevant to the seizure.

4. Arguments by the Respondent:
- Respondent supported the Commissioner's order and reasoning for extending the notice period.

5. Judgment and Reasoning:
- Tribunal analyzed whether sufficient cause existed for extending the notice period under Section 110(2) of the Customs Act, 1962.
- Commissioner extended the period due to non-cooperation of the appellant, which hindered the investigation.
- Tribunal found no infirmity in the Commissioner's order, noting the lack of explanation by the appellants regarding the seized goods and currency.
- Decision was based on the need for further investigation to ascertain if the seized items were from clandestine activities, indicating non-cooperation by the appellants.

6. Conclusion:
- The appeals were dismissed as no merit was found in the contentions raised by the appellants.
- The Tribunal upheld the Commissioner's decision to extend the notice period based on the lack of cooperation by the appellants during the investigation.