2016 (12) TMI 72 - AT - Customs

Demand - time bar - Held that - The Commissioner (Appeals) has reproduced the grounds alleged by appellant in the impugned order. It is seen that appellants have raised the plea of limitation also. Hence the ground put forward by department that such a plea does not exist is factually wrong. The next contention put forward by department is that Section 11A does not speak the relevant date to be the date of acquiring knowledge by the department, and that Commissioner (Appeals) has erred in computing the period of limitation and holding that the demand is time barred. On bare perusal of sub section (3) of Section 11A, it is seen that the argument of the respondent holds merit. The final assessment of bills of entry having concluded in 7/2006, the demand raised in 6/2008 is definitely time barred - appeal dismissed - decided against Department.

Summary

Issues:
- Interpretation of relevant date for issuance of Show Cause Notice
- Application of Section 11A of the Customs Act, 1962
- Time limitation for raising demands

Interpretation of Relevant Date for Issuance of Show Cause Notice:
The case involved a dispute regarding the relevant date for issuing a Show Cause Notice to the respondent, a service provider importing telecommunication equipment under different customs notifications. The respondent claimed exemption under Notification No. 54/2003 but was entitled to benefit under Notification No. 92/2004. The respondent cleared the goods under the wrong notification due to a system error. The Show Cause Notice was issued after a significant delay, alleging non-entitlement of the benefit and suppression of facts. The Commissioner (Appeals) set aside the demand as time-barred, considering the final assessment dates of the bill of entries. The respondent argued that the relevant date should be the date of final assessment, making the Show Cause Notice time-barred.

Application of Section 11A of the Customs Act, 1962:
The department contended that the Show Cause Notice was not time-barred as per Section 11A(3) of the Customs Act, 1962, which does not specify the date of departmental knowledge as the relevant date. The department argued that the Commissioner (Appeals) erred in considering the limitation period based on the date of departmental knowledge. However, the respondent argued that Section 11A(3) clarifies the relevant date as the date of final assessment for goods clearance. The Tribunal analyzed the provisions of Section 11A and upheld the respondent's argument that the demand raised in 2008 was indeed time-barred based on the final assessment dates in 2006.

Time Limitation for Raising Demands:
After considering the arguments from both sides, the Tribunal found no merit in the department's appeal. The Tribunal dismissed the appeal, emphasizing that the demand raised through the Show Cause Notice in 2008 was beyond the permissible time limit as per the provisions of Section 11A of the Customs Act, 1962. The Tribunal's decision was based on the interpretation of the relevant date for issuing the Show Cause Notice and the application of the statutory provisions governing the time limitation for raising demands in customs cases.