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TMI Blog2023 (8) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicate the Show Cause Notices that are issued after the amendment to Section 28(9) of the Customs Act within a period of six months or one year of the date of issuance as the case maybe. The same can be extended for a further period of one year by an officer senior in rank to the proper officer, after considering the circumstances under which the proper officer was prevented from passing an order within the prescribed period. The intention of the legislation, thus, is apparent that the show cause notices which were issued prior to the Finance Act coming into force the Finance Act, 2014 were required to be governed by unamended Act of Section 28(9) of the Customs Act. Whether in terms of erstwhile Section 28(9) of the Customs Act, the impugned SCN dated 14.02.2018 has lapsed having not been adjudicated within the period of 12 months? - HELD THAT:- The unamended Section 28(9) of the Customs Act, specifically provides that the proper officer shall determine the amount of duty within six months or within one year, as the case may be, from the date of notice. It only provides certain degree of inbuilt flexibility by incorporating the words where it is possible to do so - It is appare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Sandeep Chilana, Mr. Prem Kandpal, Mr. Snehil Sharma, Mr. Abdullah Tanveer, Ms. Anjali Jain, Mr. Ashok Thakur & Ms. Jagriti Rastogi, Advs. For the Respondents : Mr. Satish Kumar, Sr. SC with Mr. Dhruv & Mr. Atri Mandal, Advs. for R2 Mr. Harpreet Singh, Sr. SC with Ms. Suhani Mathur, Adv. for R3 & R4 JUDGMENT AMIT MAHAJAN, J 1. The present writ petition has been filed, inter alia, praying for quashing of the show cause notice bearing number F. No. DRI/MZU/F/Int-40/2017 dated 14.02.2018 read with the Corrigendum / Addendum dated 28.02.2018 (impugned SCN) issued by respondent No. 2/DRI. 2. Petitioner No. 1 is an importer and an exclusive authorised distributor of Swatch products, and distributes various brands of luxury watches, accessories, etc. The watches and accessories are imported by petitioner No. 1. Petitioner No. 2 and 3 are the Country Manager cum Director and Chief Financial Officer, respectively, of Petitioner No. 1. 3. Respondent No. 2/DRI states that it received credible information that Petitioner No. 1 is importing consignments of branded watches of Swiss origin falling under Customs Tariff item 91021100/ 91021900, from different related overseas suppliers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents have filed their replies. It is not denied that in the present case, the impugned SCN was issued by the DRI and, as held by the Hon'ble Apex Court in Canon India Private Ltd. (supra), such notices would be without jurisdiction. It is submitted that after the judgment passed by the Hon'ble Apex Court in Canon India Private Ltd. (supra), the adjudication of the impugned SCN is kept in abeyance in terms of the CBIC instructions dated 17.03.2021. The respondents further submitted that a review petition has already been filed before the Hon'ble Apex Court, and the Hon'ble Supreme Court had, vide its order dated 15.02.2022, permitted oral hearing of the said review petitions. 9. Mr. Harpreet Singh, the learned Counsel for the respondent submits that a petition has been filed seeking review of the judgment passed by the Hon'ble Apex Court in Canon India Private Ltd. (supra). It is further submitted that the amendments have been carried out in the Customs Act in the Finance Bill, 2022 and the changes have been made in Sub-section 34 of Section 2 of the Customs Act. In terms thereof, more classes of Officers of Customs have been specified as proper officers. 10. It is argued that pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interpreted Section 73(4B) (a) and (b) of the Finance Act, 1994 and held that the statutory authority was bound to decide the show cause notice within the time prescribed. In the absence of such a decision, the show cause notice was liable to be quashed. He submitted that he does not press the issue regarding the jurisdiction of the officers to issue the impugned SCN at this stage and this Court is to consider the question whether the impugned SCN has lapsed and cannot be adjudicated. Conclusion 18. Since the learned Counsel for the petitioner has contended that the petition be decided de hors the argument that Respondent No. 2 is not a proper Officer, we feel it apposite to confine the present judgment only on the issue, whether the adjudication of the impugned SCN issued on 14.02.2018 is now barred by limitation and has lapsed in view of Section 28(9) of the Customs Act. 19. Section 28(9) of the Customs Act, as in force prior to 29.03.2018 read as under: "[28. Recovery of [duties not levied or not paid or short-levied or short-paid] or erroneously refunded. xxxx xxxx xxxx xxxx (9) The proper officer shall determine the amount of duty or interest under sub-section (8),- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. From a bare perusal of amended Sub-sections (9) and (9A) of Section 28 of the Customs Act, it is evident that the proper officer is bound to pass an order within six months or one year from the date of notice as the case may be, in cases of duties not paid or short-levied or short-paid or erroneously refunded. The said period can be extended for a further period of six months or one year in the cases specified in clause (a) and (b) of Section 9, respectively, by an officer, senior in rank to the proper officer having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest within the prescribed period. 22. Further, if the proper officer is unable to determine the duty or interest for the reasons mentioned in Sub-section (9A), the proper officer is required to inform the assessee concerned, the reason for non-determination of the duty or interest, and in such case, the time prescribed in Sub-section (9) apply not from the date of Show Cause Notice but from the date when such reason ceases to exist. 23. However, explanation to Section 28(9) of the Customs Act specifically provides that in case where the notice has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, 2018 receives the assent of the President, they shall continue to be governed by the provisions of section 28 as it stood immediately before the date on which such assent is received." 28. Learned counsel for the petitioner has vehemently contended that the amendment carried out in Section 28 of the Customs Act is only procedural and applying the principles of retroactive amendment, the respondent was bound to pass an order within 12 months of coming into force the amendment to Section 28(9) of the Customs Act. He relied upon the judgment passed by the Hon'ble High Court of Punjab and Haryana in the case of M/s Harkaran Dass Vedpal v. Union of India & Ors.; CWP No. 10889 of 2017, decided on 22.07.2019. 29. We do not agree with the aforesaid contention advanced on behalf of learned counsel for the petitioner. Pursuant to the judgment passed by the Punjab and Haryana High Court in M/s Harkaran Dass Vedpal (supra), a further amendment was carried out by a Finance Act, 2020 dated 27.03.2020. The same, came into effect retrospectively from 29.03.2018. By Finance, Act, 2020, the Explanation 4 to Section 28 of the Customs Act was substituted and the same reads as under : " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies deviating from the rule, the onus shifts on the authority to prove that it was not practicable or possible to follow the rule. The same is to be adjudicated on the facts and circumstances of each case. 34. The flexibility, at the same time, in our opinion, cannot be equated with the lethargy of the Department or its officers. The Legislature has mandated the show cause notices to be adjudicated within six months or one year as the case may be; it has provided flexibility only to the extent that if the same is not practicable / possible the period can be extended. The phrase 'where it is possible to do so' would only mean that wherever it is not practicable / possible to do certain act, the period can be extended. The same, however, cannot be an endless period without any plausible justification. 35. This Court in Sunder Systems Private Limited (supra), had an occasion to consider Section 73(4B)(a) and (b) of the Finance Act, 1994, which read as under: "Section 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. - xxx xxx xxx (4B) The Central Excise Officer shall determine the amount of service tax due under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... watch Group. 13. Letter dated 27.08.2018 issued by DRI to this office. 14. Letter dated 25.09.2018 issued by DRI to this office. 15. Letter dated 30.10.2018 for personal hearing. 16. Letter issued by M/s Swatch Group on 16.11.2018. 17. Letter issued by M/s Swatch Group on 26.11.2018. 18. Personal hearing letter dated 11.02.2019 was issued. 19. Letter dated 03.04.2019 for personal hearing was issued. 20. Letter dated 29.04.2019 issued by the officer to DRI in Mumbai for verification of documents. 21. Letter dated 23.05.2019 issued by this office to DRI in Mumbai for verification of documents. 22. Letter dated 14.09.2020 issued by M/s Swatch Group. 23. Personal hearing letter dated 15.10.2020. 24. Personal hearing dated 23.10.2020. 25. Letter dated 29.10.2020 issued by M/s Swatch Group. 26. Personal hearing letter dated 03.11.2020. 27. Submission filed by the petitioner dated 25.11.2020 with respect to hearing dated 09.11.2020. 28. Personal hearing letter dated 18.01.2021. 29. Email dated 01.02.2021 to reschedule the date of personal hearing of 27.01.2021 for 09.02.2021. 30. Personal hearing letter dated 02.02.2021 wherein personal hearing for 09.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Apex Court in Canon India Private Limited v. Commissioner of Customs (supra), the proceedings in the case have become invalid. It was mentioned that since the notice was dated 19.03.2019, it would get barred by limitation on 18.03.2021 and be kept pending till the decisions is taken by the Board. The said instructions appear to have been issued to extend the period in terms of Section 28(9A) of the Customs Act. In terms thereof, if the proper officer is unable to determine the amount of the duty for the reason of a specific direction being issued by the Board for keeping the matter pending, then the time specified in Sub-section (9) shall apply not from the date of notice but from the date when such reason ceased to exist. 45. It is the case of the Revenue that the amended provision of Section 28 of the Customs Act is not applicable in the present case for the reason that the impugned SCN was issued prior to the Finance Act, 2018, coming into force. Therefore, in our opinion the benefit of extension of limitation as provided under Section 28(9A) of the Customs Act would be applicable only in those cases where the show cause notices have been issued after the enactment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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