2018 (3) TMI 1506 - HC - Customs

Validity of SCN issued after 12 years from the date of the assessment - Time limitation - The allegations of the petitioner are that, after 18 years from import and provisional assessment order, the Assistant Commissioner, Customs, issued a letter, in which it is stated that the petitioner should attend the personal hearing for finalizing the subject Bill of Entry - case of Revenue is that what the authorities have done is a continuation of the action initiated under Section 18. Held that - the process under Section 18 was finalized as per the endorsement and orders of 24th September, 2004, reproduced above. Thereafter no SCN was issued when the duty allegedly became due and payable and within the time stipulated by law. Thus, if the duty was not levied, but, leviable, then, the requirement in law and particularly Subsection (1) of Section 28 was to issue the SCN and within a period of six months from the relevant date - Admittedly, no such SCN is found in the file. Once, there is no such SCN found in the file, then, there was no sanction in law to make an Order-in-Original, particularly, after the period of nearly 18 years from the date of filing of the Bill of Entry and 12 years from the date of the assessment, as contemplated by Sub-sections (1) and (2) of Section 18. Throughout the petitioner has been demanding and issuance of the show-cause notice and furnishing a copy thereof to him. That requirement in law being not fulfilled, we do not think that we should relegate the petitioner to any alternate remedy to challenge the impugned order. The impugned order is ex-facie illegal and without jurisdiction - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenging an order of the Assistant Commissioner of Customs under Article 226 of the Constitution of India regarding the finalization of a Bill of Entry for glassware import from Indonesia, involving allegations of under valuation and discount impermissibility.

Analysis:
The petitioner, an importer with an Import Export Code, challenged an order finalizing a Bill of Entry for glassware import from Indonesia, which involved provisional assessment and clearance under a Bank Guarantee. The Directorate of Revenue Intelligence issued show-cause notices to various importers for under valuation, including the petitioner, but the charges were dropped by adjudicating authorities due to lack of evidence. The petitioner expected a show-cause notice but received a finalization order after 18 years, demanding a higher assessable value and additional customs duty.

The petitioner argued that the finalization order was illegal as it bypassed the requirement of issuing a show-cause notice under Section 28 of the Customs Act, 1962. The respondent contended that the petitioner could appeal the order but failed to address the absence of a show-cause notice. The court examined the original file, noting the completion of the provisional assessment process under Section 18, which required a show-cause notice before finalizing the duty. The court found no show-cause notice in the file, rendering the finalization order without legal sanction.

The court held the impugned order as illegal and lacking jurisdiction, allowing the petition and quashing the order to prevent manifest injustice. The court exercised its powers under Article 226 of the Constitution of India to set aside the order, emphasizing the importance of due process and legal requirements in customs matters. The ruling was in favor of the petitioner, with no costs imposed.