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2019 (1) TMI 1806 - AT - CustomsTime Limitation for issuance of SCN - Extension of time for issuance of Show Cause Notice - amended provisions of Section 110(2) of Customs Act - HELD THAT - Similar issue has come before Hon ble Tribunal in case of HARBANS LAL VERSUS COLLECTOR OF CENTRAL EXCISE CUSTOMS 1993 (7) TMI 76 - SUPREME COURT wherein it is held that two Sections 110 and 124 are independent distinct and exclusive of each other resultantly in the reviewing the proceedings of Section 124 in case itself with the seized goods might have been return or has been returned in terms of Section 110 of the Customs Act after the expiry of permissible seizure. Reliance placed in the case of Sardar Kulwant Singh vs. Collector of Central Excise and Customs 1980 (10) TMI 62 - HIGH COURT OF DELHI AT NEW DELHI wherein it is held that an order extending period of issue of Show Cause Notice under Section 110(2) and 124 of the Customs Act 1962 without giving an opportunity of being heard to the affected party is illegal. Further the requirement of issue of Show Cause Notice issued under Section 124 of the Customs Act in such a case was held to be a must relying upon the various judgments referred as above. Relying on these judgments we find that the seized goods are required to be returned to the person from whom the seizure has been made of fact of expiry of six month under Section 110 of the Act without extension of time - Regarding the Revenue contention that with effect of the amendment carried out in Section 110(2) of the Customs Act the requirement of issuance of Show Cause Notice is dispensed with is without any basis - Careful analysis of the provision makes it clear that the right of issuance of the Show Cause Notice for the extension of the period of six months as prescribed under said sub-Section of Section 110(1) remains same from which the emanate right of Show Cause Notice to the affected party in furtherance of Principle of Natural Justice as his rights are being prejudicially affected. The amendment will not obliterate the aforesaid position of issuance of Show Cause Notice has discussed above even after insertion of with new sentence in the provisions of Section 110(2) of the Act. In fact after amendment not only the Show Cause Notice is required to be issued by the Adjudicating Authority but he has also to give a reasoned order after hearing the Investigation Officer and also taking view of the affected party from whom seizure has been made as his personal right is being deprived of which emanate from the Section 110(1) of the Act that entitled him to got the goods returned which has been seized from his possession. The impugned order is in violation in this provisions of Section 110 of the Customs Act - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Applicability of the amended provisions of Section 110(2) of the Customs Act, 1962. 2. Requirement of issuing a Show Cause Notice before the extension of the time limit for issuing the Show Cause Notice. 3. Compliance with the principles of natural justice. 4. Validity of the extension order passed by the Commissioner of Customs (Port) Kolkata. Detailed Analysis: 1. Applicability of the Amended Provisions of Section 110(2) of the Customs Act, 1962: The appellants argued that the amended provisions of Section 110(2) of the Customs Act, effective from March 29, 2018, are not applicable to their case as the seizures occurred before the amendment. The Tribunal noted that the amendment was not made with retrospective effect, as evident from the Finance Act, 2018. The Tribunal referred to the Supreme Court's decision in Commissioner of Income Tax (Central-1), New Delhi vs. Vatika Township [(2014) 0 SCC 670], which held that in the absence of a provision about retrospective effect, the amendment will have prospective effect only. Therefore, the Tribunal concluded that the amended provisions do not apply to the seizures made before the amendment. 2. Requirement of Issuing a Show Cause Notice Before the Extension of the Time Limit for Issuing the Show Cause Notice: The Tribunal examined the legal provisions and judicial precedents regarding the requirement of issuing a Show Cause Notice before extending the time limit for issuing the Show Cause Notice under Section 110(2) of the Customs Act. The Tribunal referred to several judgments, including Assistant Collector of Customs vs. Charan Das Malhotra [(1971) 1 SCC 697] and I J Rao Assistant Collector of Customs vs. Bibhuti Bhushan Bagh [1989 (42) ELT 338 (SC)], which established that the person from whom the goods were seized is entitled to a notice of the proposal to extend the period of six months. The Tribunal emphasized that the right to notice flows from the fact that the proceedings are quasi-judicial, and the affected person must be given an opportunity to present their case. The Tribunal concluded that even after the amendment, the requirement of issuing a Show Cause Notice remains intact. 3. Compliance with the Principles of Natural Justice: The appellants contended that the extension of the time limit for issuing the Show Cause Notice without affording them a personal hearing violated the principles of natural justice. The Tribunal upheld this contention, emphasizing that the principles of natural justice require that the affected party be given a reasonable opportunity of being heard before an adverse decision is made. The Tribunal referred to the Supreme Court's decision in I J Rao Assistant Collector of Customs vs. Bibhuti Bhushan Bagh, which held that the person from whom the goods were seized is entitled to notice and a hearing before the extension of the time limit. The Tribunal concluded that the Commissioner of Customs (Port) Kolkata violated the principles of natural justice by not affording a hearing to the appellants. 4. Validity of the Extension Order Passed by the Commissioner of Customs (Port) Kolkata: The Tribunal scrutinized the extension order passed by the Commissioner of Customs (Port) Kolkata and found that it lacked independent application of mind. The order merely stated, "GC issued dated 26/06/2018," without providing any reasoning or justification for the extension. The Tribunal emphasized that the Adjudicating Authority must provide a reasoned order after examining the merits of the extension request and recording their findings. The Tribunal concluded that the extension order was not sustainable as it did not comply with the legal requirements and lacked proper reasoning. Conclusion: The Tribunal set aside the impugned orders and allowed the appeals with consequential relief as per law. The Tribunal held that the amended provisions of Section 110(2) of the Customs Act do not apply retrospectively, and the requirement of issuing a Show Cause Notice before extending the time limit remains intact. The Tribunal also emphasized the importance of complying with the principles of natural justice and providing a reasoned order for the extension of the time limit.
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