2003 (12) TMI 80 - HC - Customs

Issues Involved:
1. Whether the show cause notice dated 28-3-2000 was barred by time under Section 28(1) of the Customs Act, 1962.
2. Whether the Tribunal was correct in holding that the larger period of limitations prescribed under proviso to Section 28(1) was not applicable in the present case.
3. Whether the Tribunal should have held that the Respondents were guilty of suppression of facts by producing incorrect Transfer Letters.
4. Whether the Tribunal was correct in not deciding the questions of liability to confiscation of the goods and imposition of penalty.
5. Whether the question of Show Cause Notice being barred by time was irrelevant due to provisional assessments.
6. Whether the Tribunal was correct in applying the judgment in the matter of M/s. Purlux Electric Pvt. Ltd. to the facts of the case.

Detailed Analysis:

1. Barred by Time under Section 28(1):
The Tribunal held that the demand made against the respondent company was barred by limitation. The goods were imported under a value-based Advance Licence, which was revalidated and registered at the Mumbai Custom House. The proper officer issued Telegraphic Release Advice to the Assistant Commissioner of Customs, Goa, allowing duty-free clearance. The Tribunal found no suppression or wilful mis-statement by the respondent company, and the Show Cause Notice lacked allegations of suppression against the respondent company, focusing instead on the previous holder of the licence. Consequently, the extended period of limitation under Section 28(1) was not applicable.

2. Larger Period of Limitations:
The Tribunal relied on its earlier decisions, including Purulax Electric (P) Ltd. v. Commissioner of Customs, Mumbai, and Scientific Pharmacy v. Commissioner of Customs, ACC, Mumbai, to conclude that the extended period of limitation cannot be invoked against the transferee for misrepresentation by the transferor. The Tribunal held that the proviso to Section 28(1) was not attracted against the respondent company, setting aside the demands as time-barred.

3. Suppression of Facts:
The Tribunal found no evidence or allegations in the Show Cause Notice that the respondent company had knowledge or was under reasonable belief that the transferor was not the legitimate holder of the Advance Licence. The Tribunal concluded that there was no suppression or wilful mis-statement by the respondent company.

4. Liability to Confiscation and Penalty:
The Tribunal did not record any findings on the merits of the case regarding the liability to confiscation of goods and imposition of penalty, as the demand was set aside solely on the ground of being time-barred.

5. Provisional Assessments:
The Tribunal did not consider the question of provisional assessments affecting the applicability of the limitation period under Section 28(1), as the demand was already deemed time-barred.

6. Application of M/s. Purlux Electric Pvt. Ltd. Judgment:
The Tribunal applied the judgment in M/s. Purlux Electric Pvt. Ltd. v. Commissioner of Customs, Mumbai, which held that the extended period of limitation cannot be invoked against the transferee for misrepresentation by the transferor. The Tribunal's reliance on this judgment was deemed appropriate, as the facts of the case were similar.

Conclusion:
The High Court declined to enter into the reference, accepting the respondent company's submission that the principal issue regarding the demand being barred by limitation was conclusively settled by the Supreme Court in Goodluck Industries v. Commissioner of Customs, Calcutta. The Tribunal's reliance on previous decisions, which the Department had not challenged, meant that the issue was already concluded. Consequently, the High Court dismissed the reference application and the associated Misc. Civil Applications. The Court also noted that it lacked jurisdiction to grant interim relief in reference proceedings, as established in Commissioner of Income Tax v. Bansi Dhar and Sons.

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