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Issues: Misdeclaration of goods value, seizure under Section 110 of the Customs Act, extension of show cause notice period under Section 124(a), applicability of Section 110(2) in case of provisional release against bond and cash deposit, setting aside of show cause notice and Commissioner's order, direction for adjudication under Section 124 within three months, refund claim beyond the scope of the appeal.
The judgment by the Appellate Tribunal CESTAT, New Delhi involved a case where the appellants imported computer hardware from a US company, declaring a lower value compared to an invoice from an Italian company. The Department seized the goods under Section 110 of the Customs Act due to suspected misdeclaration. Subsequently, the goods were provisionally released to the appellants against a bond and cash deposit. A show cause notice was issued by the Commissioner of Customs to extend the period for issuance of a show cause notice under Section 124(a) of the Act. The appellants challenged this extension order. The Tribunal analyzed the case law cited by the appellants and the findings of the Commissioner. It was noted that the goods were provisionally released to the appellants and were not available for confiscation when the show cause notice was issued. Referring to previous decisions, the Tribunal held that Section 110(2) of the Customs Act was not applicable once the goods had been released to the party and were no longer under seizure. The Tribunal found that the appellants had no liability under Section 110(2) in such circumstances, in line with previous rulings by the Apex Court and the Tribunal. Based on the cited decisions, the Tribunal concluded that Section 110(2) ceased to be applicable to the appellants after the goods were provisionally released against securities. Consequently, the show cause notice and the Commissioner's order were set aside. The Tribunal also emphasized that the Department could proceed under Section 124 for confiscation without relying on Section 110(2) if valid grounds existed, but action should be taken within a reasonable period from the seizure date. The Commissioner was directed to adjudicate on any show cause notice under Section 124 within three months from the date of the Tribunal's order. Additionally, the Tribunal clarified that the appellants' refund claim was beyond the scope of the appeal, as the dispute did not concern the admissibility of any refund claim. Both parties were advised to take appropriate steps regarding the deposit based on the finalization of the Bill of Entry assessment. Ultimately, the appeal was allowed to the extent mentioned in the judgment.
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