2021 (12) TMI 1064 - AT - Customs

Provisional release of goods - import of Dry Dates - non-furnishing of Phytosanitary Certificate of country of origin - HELD THAT -The show cause notice is required to be issued within six months from the seizure of the goods and if the show cause notice cannot be issued within six months, then after recording the reason in writing, the period can be extended for another six months. Further, in case of the goods were provisionally released, then the period of six months shall not apply. Admittedly, in this case, the goods were not allowed to be released provisionally. Therefore, the time limit prescribed under Section 110(2) of the Act shall apply to the facts of the case. Therefore, the show cause notice was required to be issued within six months from the date of seizure i. e. till 01.01.2021, further no time limit has been extended by recording the reasons in writing as the proviso to Section 110(2) of the Act. In the show cause notice, it has been mentioned that the show cause notice was required to be issued on 17.03.2021 under Section 110(2) of the Customs Act, 1962 which has been extended by letter dt. 16.03.2021 that the same has been extended up to 30.06.2021 which is against the law as six months period was expired on 01.01.2021 of the seizure and within six months till 01.01.2021, the Revenue was required to pass an order recording reasons in writing for extension of time. No such order is placed on record - the show cause notice issued to the appellant is barred by limitation, therefore, the show cause notice for absolute confiscation is not sustainable. Accordingly, the goods are required to be released to the appellant after examination thereof to find out whether same are fit for human consumption or not and the demurrage and detention charges are required to be waived. The two parallel proceedings cannot continue together. As the show cause notice dated 30.06.2021 has been issued beyond the time limit prescribed under Section 110(2) of the Act, therefore, the show cause notice dt. 30.06.2021 is barred by limitation and the goods are required to be returned to the appellant. As the Show Cause Notice dated 16.11.2021 is not the subject matter of the appeal, therefore, the Revenue is at liberty to adjudicate the show cause notice dt. 16.11.2021 in accordance with law. The show cause notice has been issued to the appellant beyond the time limit prescribed under Section 110(2) of the Act on 30.06.2021 whereas the goods have been seized on 19.05.2020 and no order recording reasons in writing has been passed for extension of time, therefore, the show cause notice issued to the appellant for absolute confiscation of the goods is not sustainable - Revenue is directed to release the goods to the appellant after examining the same whether same are fit for human consumption or not and the demurrage and detention charges are required to be waived. Appeal disposed off.

Issues Involved:
1. Jurisdiction of the Single Member Bench.
2. Provisional release of impugned goods.
3. Timeliness of show cause notice under Section 110(2) of the Customs Act, 1962.
4. Validity of absolute confiscation of goods.
5. Demurrage and detention charges.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Single Member Bench:
The Revenue raised a preliminary objection regarding the jurisdiction of the Single Member Bench, arguing that the issue involved relates to classification and rate of duty. However, it was clarified that the only issue before the Tribunal was the provisional release of the impugned goods. Consequently, the preliminary objection was turned down, and the appeals were addressed on their merits.

2. Provisional Release of Impugned Goods:
The appellants sought the provisional release of goods that were perishable in nature. The Tribunal allowed the applications for early hearing due to the perishable nature of the goods. The main contention was whether the impugned goods could be released provisionally. The Tribunal noted that the goods were seized without being provisionally released, and the show cause notices for absolute confiscation were issued beyond the prescribed time limits.

3. Timeliness of Show Cause Notice under Section 110(2) of the Customs Act, 1962:
In both appeals, the Tribunal examined the timeliness of the show cause notices. Under Section 110(2) of the Customs Act, 1962, a show cause notice must be issued within six months from the date of seizure, extendable by another six months with recorded reasons. In Appeal No. C/60421/2021, the goods were seized on 02.07.2020, and the show cause notice was issued on 30.06.2021, beyond the permissible period. Similarly, in Appeal No. C/60420/2021, the goods were seized on 19.05.2020, and the show cause notice was issued on 30.06.2021. In both cases, no order extending the time limit was recorded, rendering the show cause notices barred by limitation.

4. Validity of Absolute Confiscation of Goods:
The Tribunal held that the show cause notices for absolute confiscation were issued beyond the prescribed time limits, making them unsustainable. In Appeal No. C/60421/2021, it was noted that the goods were cleared for human consumption after an investigation by SIIB, which concluded that the goods originated from the Kingdom of Saudi Arabia. This order attained finality as it was not challenged by the Revenue. The Tribunal directed that the goods be released to the appellants after examining their fitness for human consumption.

5. Demurrage and Detention Charges:
The Tribunal directed that the demurrage and detention charges be waived. It was emphasized that the goods are perishable, and a long time had elapsed since their import. Therefore, the goods should be examined for fitness for human consumption before release.

Separate Judgments for Each Appeal:

Appeal No. C/60421/2021:
The Tribunal concluded that the show cause notice issued on 30.06.2021 was barred by limitation. The goods were to be released to the appellant after examination for fitness for human consumption, and demurrage and detention charges were to be waived. The Tribunal also noted that parallel proceedings for absolute confiscation and duty demand could not continue simultaneously. The show cause notice dated 16.11.2021 for duty demand was not the subject matter of the appeal and could be adjudicated separately.

Appeal No. C/60420/2021:
The Tribunal similarly concluded that the show cause notice issued on 30.06.2021 was barred by limitation. The goods were to be released to the appellant after examination for fitness for human consumption, and demurrage and detention charges were to be waived.

Conclusion:
Both appeals were disposed of with directions to release the impugned goods after examination for fitness for human consumption and waiver of demurrage and detention charges. The show cause notices for absolute confiscation were deemed unsustainable due to being issued beyond the prescribed time limits.

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