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Issues involved: Interpretation of Sections 110(2) and 124(a) of the Customs Act, 1962 regarding the time limit for issuing a show cause notice in adjudication proceedings.
In this judgment, the Supreme Court addressed an appeal challenging the judgment of the High Court of Madras in a case involving adjudication proceedings under the Customs Act, 1962. The appellant contested the proceedings on the basis that the show cause notice required by Section 124(a) was not issued within six months of the seizure of goods as mandated by Section 110(2) of the Act. The High Court held that the time limit specified in Section 110(2) was related to the power to retain seized goods beyond six months and did not invalidate the power to adjudicate even if the notice was issued after the stipulated period. The Court heard arguments from both parties' advocates, with the appellant's counsel contending that a show cause notice under Section 124(a) could not be issued after six months of seizure, citing the proviso in Section 110(2) which deals with the seizure of goods. The Court observed that the consequence of not issuing a notice within six months, as per Section 110(2), was limited to the return of seized goods to the owner, without prescribing a specific limitation period for issuing the notice under Section 124(a). The Court referenced a previous case to support the view that the delay in issuing the show cause notice beyond six months affected the power to detain seized goods but did not strip the adjudicating authority of the power to proceed with the proceedings. Ultimately, the Court found no merit in the appeal and dismissed it without any order as to costs.
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