2021 (7) TMI 388 - HC - Customs

Validity of adjudication of SCN after a long gap - SCN has been issued on 14.05.2009 and is pending till date with finalization of proceedings as contemplate under Section 28 of the Customs Act, 1962 - HELD THAT - It is an admitted position that the show cause notice has been issued in terms of Section 28 of the Act. Section 28(9)(a) calls for a determination of the duty of the interest under the show cause notice within a period of six months from the date of notice. This date has long passed - Section 28(9)(b) imposes a time limit of one year and Mr.Chopda argues that the aforesaid time limit was not operative at the time when the show cause notice was issued. Section 28(9)(a) however, grants time of only six months for determination of the duty and interest where it is possible for the revenue to do so. The counter filed by the revenue does not reveal any circumstances, which would justify the elapse of time from 2009 till date, of more than twelve years to keep the proceedings pending. The normal defence offered is that the issue has been transferred to the call book. Even this defence has not raised in this case. The explanation offered, to the effect that there was a change in incumbent officer is hardly acceptable. Petition allowed.

Summary

Issues:
Challenge to show cause notice for customs duty recovery based on delay in finalizing proceedings under Section 28 of the Customs Act, 1962.

Analysis:
The petitioner contested a show cause notice dated Nil-8-2009 demanding customs duty for a Bill of Entry filed on 25.08.2009. The factual details were deemed irrelevant to the legal issue at hand. The petitioner responded on 05.09.2009, explaining the situation and referencing a prior personal hearing on 13.04.2009 where clarifying documents were submitted.

Subsequently, a letter on 18.11.2016 instructed the petitioner to pay the demand from the earlier notice and attend a personal hearing on 28.11.2016. The petitioner complied, reiterating their defense in a letter dated 15.12.2016. Despite requests to reverse an alert on the Customs portal and close the 2009 proceedings, no action was taken by the respondent, prompting the filing of the present writ petition seeking alert removal.

In a related writ petition disposed of earlier, the alert reversal was confirmed based on the submission of Mr. Pramod Kumar Chopda. The primary challenge to the show cause notice was its issuance on 14.05.2009 and the prolonged pending status without finalizing proceedings under Section 28 of the Customs Act, 1962.

Section 28(9)(a) mandates determining duty and interest within six months of the notice, a timeline that had elapsed. While Section 28(9)(b) imposes a one-year limit, it was argued that this provision was not applicable at the notice's issuance. The revenue's defense failed to justify the extended delay of over twelve years, with no mention of transferring the issue to the call book or changes in officers being acceptable reasons.

Consequently, the court quashed the show cause notice and allowed the writ petition, with no costs incurred. The connected miscellaneous petition was closed as a result of the judgment.