2015 (10) TMI 1100 - HC - Customs

Period for issuance of SCN for confiscation of goods under Section 110 (2) of the Customs Act 1962 - Power of Commissioner if not exercised within the stipulated period of six months the seized goods are liable to be released Contended by Petitioner that goods are liable to be released as the period of extension lapsed. Respondent submits that date of confiscation not to be included to compute the period of six months - Order impugned was passed prior to the period and same would extend for a further period of six months from expiry of initial period of six months. Held That - Section 110(2) stipulates that Commissioner for sufficient cause is empowered to extend the said period by a further period not exceeding six months - Date on which goods were seized is to be excluded - Since extension would come into effect for six months on the expiry of the initial period mentioning of date would not have any consequence. No infirmity found in order impugned - Commissioner can exercise powers under Section 110(2) and can extend initial period of six months by a further period of six months Found no merit in the Petition Decided in favour of the Revenue.

Summary

Issues Involved:
1. Validity of the extension of the period for issuance of a show-cause notice under Section 110(2) of the Customs Act, 1962.
2. Computation of the six-month period for the issuance of a show-cause notice.
3. Applicability of Section 9 of the General Clauses Act in computing the period of limitation.

Issue-wise Detailed Analysis:

1. Validity of the Extension of the Period for Issuance of a Show-Cause Notice:
The petitioner challenged the order dated 02.09.2015, by which the Commissioner of Customs extended the period for issuing a show-cause notice for confiscation of goods under the proviso to Section 110(2) of the Customs Act, 1962. The petitioner contended that the extension was invalid as it was granted after the initial six-month period had expired. The court examined the provisions of Section 110(2), which stipulates that if no notice is issued within six months of the seizure of goods, they must be returned to the person from whom they were seized. The proviso allows the Commissioner to extend this period by another six months for sufficient cause.

2. Computation of the Six-Month Period for the Issuance of a Show-Cause Notice:
The petitioner argued that the six-month period expired on 02.09.2015, and since the extension was from 04.09.2015, the goods should be released. The court noted that the goods were seized on 03.03.2015, and a show-cause notice was issued on 31.08.2015. The Commissioner extended the period on 02.09.2015, before the expiry of the initial six months. The court referred to the Supreme Court's judgment in I. J. Rao, Asstt. Collector of Customs & Others v. Bibhuti Bhushan Bagh and Another, which emphasized that notice must be issued before the expiry of the six-month period. In this case, the notice and the extension order were both issued within the initial period.

3. Applicability of Section 9 of the General Clauses Act in Computing the Period of Limitation:
The respondent argued that under Section 9 of the General Clauses Act, the date of seizure (03.03.2015) should be excluded, making the six-month period end on 03.09.2015. The court referred to the Supreme Court's judgment in M/s. Econ Antri Limited v. M/s. Rom Industries Ltd. & Anr., which held that the date on which the goods were seized must be excluded in computing the limitation period. Therefore, the initial six months commenced on 04.03.2015 and ended on 03.09.2015. The extension from 04.09.2015 was thus valid.

Conclusion:
The court found no infirmity in the order impugned in the petition. The Commissioner of Customs, exercising powers under the proviso to Section 110(2), validly extended the initial six-month period by another six months. Consequently, the writ petition was dismissed, and the parties were left to bear their own costs.