2024 (11) TMI 302 - AT - Customs

Show cause notice adjudicated upon beyond the time contemplated u/s 28 (9) of the Customs Act - scope of amended provisions of section 28(9) - HELD THAT - The show cause notice dated 17.10.2017 issued to the appellant would be governed by the unamended provisions of section 28(9) of the Customs Act. The unamended section 28(9) of the Customs Act provides that the proper officer shall determine the amount of duty or interest under sub-section (a) within six months from the date of notice, where it is possible to do so, or under sub-section (b) within one year from the date of notice, where it is possible to do so. The Commissioner, in the impugned order, has recorded a finding that despite the issuance of the show cause notice dated 17.10.2017, the appellant for a long period of time did not file any reply and, in fact, sought copies of the relied upon documents and annexures. Thereafter, he filed an interim reply dated 07.04.2021. Commissioner, further noticed that due to covid related restrictions, the adjudication proceedings were taken up only in February 2021. Thereafter, the appellant again sought a copy of the show cause notice through an advocate which was made available to the appellant in March 2021. The personal hearing took place on 03.06.2021 and the matter was adjudicated on 29.06.2021. Commissioner has given good and cogent reasons for holding that it was not possible to adjudicate the show cause notice within time as stipulated under the unamended section 28(9) of the Customs Act. All that has been pointed out by appellant is that even if the appellant had not filed any reply to the show cause notice, the Commissioner should have adjudicated the show cause notice within the stipulated time. This aspect has already been examined in the earlier part of this order. Appellant has not made any submissions on the merits of the order and, therefore, only the limitation aspect has been considered. Thus, for all the reasons stated above, there is no infirmity in the order passed by the Commissioner. The appeals, therefore, deserve to be dismissed.

Summary

Issues Involved:

1. Whether the adjudication of the show cause notice was time-barred under section 28(9) of the Customs Act, 1962.
2. Whether the amended provisions of section 28(9) of the Customs Act apply retrospectively to the show cause notice issued on 17.10.2017.
3. Justification of the reasons provided by the Commissioner for the delay in adjudication.

Issue-wise Detailed Analysis:

1. Time-barred Adjudication under Section 28(9) of the Customs Act:

The primary contention raised by the appellant was that the adjudication of the show cause notice dated 17.10.2017 was conducted beyond the time limit specified in section 28(9) of the Customs Act, which originally required the determination of duty within six months or one year from the date of notice, depending on the circumstances. The appellant argued that the proceedings should be deemed concluded as if no notice had been issued due to this delay. The Commissioner, however, justified the delay by highlighting that the appellant did not file a reply for a considerable time and sought additional documents, which contributed to the delay. Furthermore, the adjudication was affected by the transfer of the case and COVID-related restrictions, which were considered valid reasons for the delay.

2. Retrospective Application of Amended Section 28(9):

The appellant contended that the amended provisions of section 28(9), which allow for an extension of the adjudication period by a senior officer, should apply retrospectively to the show cause notice issued before the amendment. The appellant relied on the judgment of the Punjab & Haryana High Court in Prabhat Fertilizers and Chemicals Works to support this claim. However, the Commissioner and the Tribunal rejected this contention, citing the substituted Explanation 4, which explicitly states that notices issued prior to the amendment date of 29.03.2018 would be governed by the unamended provisions. The Tribunal also referred to the Delhi High Court's judgment in Swatch Group India Pvt Ltd. vs. Union of India, which clarified that the intention of the legislature was for the unamended provisions to apply to notices issued before the amendment.

3. Justification for Delay in Adjudication:

The Tribunal examined whether the reasons provided by the Commissioner for the delay were justified. The Commissioner noted that the appellant did not file a reply promptly and requested additional documents, which delayed the process. Additionally, the case was transferred between authorities, and COVID-19 restrictions further impacted the timeline. The Tribunal found these reasons to be cogent and sufficient to justify the delay beyond the prescribed period under the unamended section 28(9). The Tribunal concluded that the adjudication was not time-barred due to these circumstances.

In conclusion, the Tribunal upheld the Commissioner's order, dismissing the appeals on the grounds that the adjudication was conducted in accordance with the unamended provisions of section 28(9) and that the reasons for the delay were justified. The Tribunal did not find any merit in the appellant's arguments regarding the retrospective application of the amended provisions or the alleged time-barred nature of the adjudication.