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2019 (6) TMI 169 - AT - CustomsExtension of time limit for issuance of SCN - whether the Commissioner is required to issue notice to the importer proposing extension of time limit for issuance of SCN or he may extend the time limit without putting the importer to the notice? - HELD THAT - The same issue for the period after the amendment in Section 110 has come up before the Tribunal-Delhi in the case of M/S SWEES GEMS JEWELLERY, M/S AARADHYA IMPEX VERSUS CGST CE, JAIPUR-I 2019 (2) TMI 1375 - CESTAT NEW DELHI , the Tribunal after interpreting and discussing the difference in the provision of Section 110(2) before and after amendment came to the conclusion that the amendment is not such that the department is not required to issue SCN. There is no legal authority with the department for dispensing with the issuance of SCN to the appellant, therefore, the impugned order passed without issuance of any SCN will not sustain - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Legality of extending the time limit for issuing the Show Cause Notice (SCN) without issuing an SCN for this purpose under Section 110(2) of the Customs Act, 1962. Issue-wise Detailed Analysis: 1. Legality of Extending Time Limit for Issuing SCN Without Issuing an SCN: The core issue in this case is whether the extension of the time limit for issuing an SCN under Section 110(2) of the Customs Act, 1962, without issuing an SCN for this purpose, is legal and correct. - Appellant's Argument: The appellant argued that under the old Section 110, the extension of the six-month period for issuing an SCN required "sufficient cause being shown." The amended Section 110, effective from 29.03.2018, replaced this with "for reasons to be recorded in writing." The appellant contended that even under the amended provision, it is mandatory to issue a notice to the assessee before extending the time limit, as the reasons must be recorded in writing. The appellant claimed that the department's failure to issue such a notice violated the principle of natural justice, making the extension order liable to be quashed. The appellant relied on several judgments, including M/s Swees Gems & Jewellery, SRK Metal & Industries, IJ Rao Assistant Collector of Customs, Harbans Lal vs Collector of C.Ex., Gaunir Impex Pvt. Ltd., and CCE vs Beauty Gem. - Respondent's Argument: The respondent argued that under the amended Section 110, the only requirement for extending the six-month period for issuing an SCN is that the competent authority must record the reason in writing. The respondent explained that due to ongoing investigations and inquiries from foreign agencies, it was not possible to issue the SCN within the six-month period. Therefore, the Commissioner extended the time after recording the reason in writing. - Tribunal's Findings: The Tribunal examined whether the Commissioner is required to issue a notice to the importer proposing the extension of the time limit for issuing an SCN. The Tribunal referred to the Bombay High Court's judgment in Principal Commissioner of Customs vs Beauty Gem, which held that the Commissioner could not extend the time without recording satisfaction based on material on record that the investigation is being pursued seriously and there is a need for more time. The High Court emphasized that merely because the investigation is delayed, it is not a ground for extending the time limit. The Tribunal also referred to the Madras High Court's judgment in Gaunir Impex Pvt. Ltd., which held that the department must follow the principles of natural justice, including issuing an SCN for the extension of time. The Tribunal noted that in the present case, no SCN was issued for extending the time limit. The Tribunal referred to its own decision in M/s Swees Gems & Jewellery, which concluded that even after the amendment, the department is required to issue an SCN. The Tribunal emphasized that the amended provision requires the Commissioner to record reasons in writing and inform the person from whom the goods were seized before the expiry of the specified period. The Tribunal observed that the amendment did not change the requirement of issuing an SCN, and the principles of natural justice must be followed. The Tribunal found that the Commissioner did not record the reasons properly in the order and that the extension of the time limit without issuing an SCN was not sustainable. - Conclusion: The Tribunal concluded that the impugned order extending the time limit for issuing an SCN without issuing an SCN for this purpose is not sustainable. The Tribunal set aside the impugned order and allowed the appeal with consequential reliefs, including the return of the imported goods to the appellant. Pronouncement: The judgment was pronounced in the open court on 03.06.2019.
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