2023 (12) TMI 1343 - HC - Customs

Recovery of short levied duty alongwith interest on the said short levied duty - wrong exemption claimed by the petitioner by classifying the goods on wrong customs heads - competence of Deputy Commissioner of Customs to issue SCN - SCN barred by limitation under the provisions of Section 28(9) of the Customs Act, 1962 or not - HELD THAT - The imported goods covered in the bill of entry No. 7517069, dated 24-4-2020 were out of charge on 5-5-2020 and, therefore, the last date for issuance of Show Cause Notice would be 3-5-2022. However, the subject Show Cause Notice was issued on 20-4-2022 and, therefore, the said notice was well within time. The next objection of the petitioner is in respect of the demand for the Bills of Entry Nos. 7572108, dated 2-5-2020 and 7985069, dated 23-6-2020 which were said to be barred by limitation under the provisions of Section 28(9) of the Customs Act, 1962 was also rejected. It was said that only an interim Show Cause Notice was issued vide the letter dated 23-5-2022. Later on, a corrigendum to Show Cause Notice was issued on 15-10-2022 for a change of adjudication authority due to the monetary limit in terms of Notification No. 29/2022-Customs (N.T.), dated 31-3-2022. The petitioner did not submitted any reply to the show cause notice. In due observance to the principles of natural justice, the new adjudication authority had given the importer reasonable opportunity of personal hearing before the adjudication of the case. Short payment of customs duty and wrong exemption claimed by the petitioner by classifying the goods on wrong customs heads - HELD THAT - There are no substance in the challenge to the order-in-original on the ground of barred by limitation. The 2nd ground that the Show Cause Notice was not issued by the competent authority, the petitioner never took this objection before the adjudication authority in his reply or the submissions. This is the first time the petitioner has raised this objection before this Court. Even the Show Cause Notice is not challenged in this writ petition, and it is only the order-in-original which has been challenged. Even otherwise it is the order-in-original which is under challenge and that has been passed by the competent authority. It is not the case of the petitioner that the order-in-original has not been passed by the competent authority. This writ petition is hereby dismissed leaving it open to the petitioner to approach the appellate authority if he so advised against the impugned order-in-original, and if appeal is filled, the same shall be adjudicated in accordance with the law.

Summary

Issues:
Challenge to order-in-original on grounds of jurisdiction and limitation.

Analysis:
The petitioner challenged the order-in-original primarily on two grounds. Firstly, the petitioner argued that the notice was issued by an incompetent authority, the Deputy Commissioner of Customs, which rendered the subsequent order without jurisdiction. Secondly, the petitioner contended that the order was passed beyond the limitation period prescribed under Section 28(9) of the Customs Act, making it void. The petitioner imported Clear Float Glass and claimed a BCD exemption under a specific notification. However, a post-clearance audit revealed a misclassification resulting in a short levy of duty amounting to Rs. 7,17,374.

The Show Cause Notice was issued to the petitioner, who responded but did not raise objections regarding the competence of the issuing authority. A corrigendum was later issued to change the adjudicating authority due to the amount involved. The petitioner raised objections regarding the limitation period for issuance of the notice and the demand for certain bills of entry, but these objections were rejected by the 1st respondent in the impugned order. The respondent held that the goods were wrongly classified, and the exemption claimed was not applicable, rejecting the petitioner's objections on limitation grounds as well.

The High Court judge found that the petitioner's challenges lacked merit. The court noted that the petitioner had not raised the issue of the notice being issued by an incompetent authority before the adjudication authority or in the submissions. The judge emphasized that it was the order-in-original, not the notice, that was challenged, and it was passed by the competent authority. The judge also dismissed the petitioner's argument on the limitation period, stating that the one-year limitation applied in this case. The judge ultimately dismissed the writ petition, allowing the petitioner to appeal the order-in-original while staying the revenue recovery notice for a month if an appeal is filed. The court clarified that any observations made were confined to the two grounds raised in the petition.

In conclusion, the High Court dismissed the writ petition, finding no merit in the petitioner's challenges to the order-in-original based on jurisdiction and limitation grounds. The court allowed the petitioner to appeal the decision while providing a temporary stay on the revenue recovery notice if an appeal is filed.