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TMI Blog2024 (3) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner (Appeal) in the Appellate Order dated 01-08-2022 has held that the finalization of provisional assessment is barred by limitation. Para 3.1 of the CBIC Instruction; the limitation under Rule 5 of 2018 Regulation is applicable prospectively w.e.f. 14-08-2018, is not applicable to present case as the Bills of Entries are assessed provisionally in 2011-12 and 2012-13 i.e. much before 14-08-2018. It is not out of place here to mention that Rule 5 of Customs (Finalization of Provisional Assessment) Regulation, 2018 (the 2018 Regulation) applies only to provisional assessment made after 14-08-2018; hence, in the case at hand it cannot be applied on the provisional assessments of the 4 Bill of Entries as they are made in the year 2012. The limitation for finalization to the case at hand would be governed by Para 3.1 of the CBIC Instruction as per which the finalization of provisional assessment is to be made expeditiously, well within 6 months whereas in the instant case the finalization is done after 6 years to 9 years. We hold that the 1st Appellate Order dated 10-08-2022 which is challenged along with validity of aforesaid two show cause notices both dated 20-04-2018 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 128 read with Section 128A of the Customs Act, 1962 and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962; B. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Original dated 19-11-2018 bearing No. CC(P)/BBSR/CUS/No-16/Joint Commissioner/2018 passed by the Respondent No. 4 which is at Annexure- 2 of this Petition and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and also that it is barred by limitation under Section 28(9)(a) ibid; C. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Original dated 19-11-2018 bearing No. CC(P)/BBSR/CUS/No-17/Joint Commissioner/2018 passed by the Respondent No. 4 which is at Annexure- 3 of this Petition and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and also that it is barred by limitation under Section 28(9)(a) ibid, D. For issuance of writ(s), o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which is at Annexure- 3 of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction; D. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 03-04-2018 bearing No. C. No. VIII(6)40/CUS/DMR/2012/447 issued by the Respondent No. 3 finally assessing the Bill of Entry No. 260/HC/2011-12 Dated 20.03.2012, which is at Annexure- 4 of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction; E. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 03.04.2018 bearing No. C. No. VIII(6)40/CUS/DMR/2012/448 issued by the Respondent No. 3 finally assessing the Bill of Entry No. 261/HC/2011-12 Dated 20.03.2012, which is at Annexure- 5 of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction 4. The brief fact of the case is that the Petitioner is a Company having its registered office and factories i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(d), Section 111(m) and Section 112(a) of the said Act. Both the Show Cause Notices are issued under Section 28(1) as no case of collusion, wilful mis-statement or suppression of facts is alleged and no penalty for such offences under Section 114A of the Customs Act, 1962 is proposed. 6. Mr. Kartik Kurmi assisted by Mr. N. K. Pasari and Ms. Sidhi Jalan, learned counsels for the petitioner submits that the Show Cause Notice is issued under Section 28(1) as no case of collusion, wilful mis-statement or suppression of facts is alleged and no penalty for such offences under Section 114A of the Customs Act, 1962 is proposed or imposed. In the year 2012, the Petitioner entered into High Seal Sale vide Agreement dated 02-03-2012 with M/s QVC Exports Private Ltd., (Bill of Entry No. 260/HC/2011-12] and Agreement dated 02-03-2012 with M/s QVC Exports Private Ltd., (Bill of Entry No. 261/HC/2011-12] for import of Steam Coal of South African Origin for use in its factory in the State of Jharkhand for manufacture of Sponge Iron and generation of electricity for use in the production of finished goods. The said Steam Coal was imported by the Petitioner as an importer within the meaning of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012-Cus dated 17-03-2012 and not NIL as claimed by the Petitioner under Sl. No. 123 of the said Notification. 8. Learned counsel specifically asserted that the Show Cause Notices are issued under Section 28(1) as no case of collusion, wilful mis-statement or suppression of facts is alleged and no penalty for such offences under Section 114A of the Customs Act, 1962 is proposed. The Respondent No. 3 vide one earlier Order-in-Appeal dated 01-08-2022 bearing No. 107-110/CUS/CCP/2022 disposed of the said two appeals against Final Assessment of Bill of Entry No. 260/DC/2011-12 and Bill of Entry No. 261/HC/2011-12 including finalization of two other Bill of Entries, by a common Order-in-Appeal dated 01-08-2022, set aside the Final Assessment Orders dated 03-04-2018 (Annexure-10 Annexure-11] against which the said appeals were filed before him and remanded the matter back to the lower authority with a direction to issue a speaking order after providing reasonable opportunity of hearing before finalization of the Bill of Entries as per the Section 18(1A) of the Customs Act, 1962 and Regulation 5 and 6 of the Customs (Finalization of Provisional Assessment) Regulation, 2018. 9. Mr. Kurmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Section 28(1)(a) of the Customs Act, 1962 has framed Pre-Notice Consultation Regulations, 2018 w.e.f. 02-04-2018 vide Notification No. 29/2018-Cus. (NT) dated 02-04-2018. It is submitted that under proviso to Section 28(1)(a) of the Customs Act, 1962 provides that before issuing the show cause notice, the proper officer shall hold pre-notice consultation with the person chargeable with duty or interest in such manner as prescribed under the Pre-Notice Consultation Regulations, 2018. The Respondent No. 4 vide impugned Order-in-Originals both dated 19-11-2018 (Annexure-2 Annexure-3 ) against two Show Cause Notices both dated 20-04-2018, (Annexure- 4 and Annexure 5 ) after lapse of 7 months i.e. beyond limitation of six months as provided under section 28(9)(a) of the Act in respect of Bill of Entry No. 260/HC/2011-12 dated 20-03-2012 and Bill of Entry No. 260/HC/2011/12 dated 20-03-2012 arbitrarily determined the differential Basic Customs duty along with interest and also imposed equal penalty under Section 112(a) of the Act. The demand is confirmed under Section 28(1) of the Act. He reiterated that in the impugned Order, no case of collusion, wilful mis-statement or suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding is barred by limitation. The Petitioner by the instant writ petition is further challenging the legality and validity of impugned Final Assessment Order dated 26.06.2021 (Annexure-2), dated 20/21.09.2021) (Annexure-3), dated 03.04.2018 (Annexure-4) and dated 03.04.2018 (Annexure-5) finalizing 4 Bill of Entries No. 158/HC/2012-13 Dated 17.07.2012, No. 341/HC/2012-13 Dated 26.11.2012, No. 260/HC/2011-12 Dated 20.03.2012 and No. 261/HC/2011-12 Dated 20.03.2012 respectively. From records it is evident that the aforesaid 4 Bill of Entries were filed in the year 2012. The Superintendent Customs, Dhamra Port, in the State of Odisha provisionally assessed the said Bill of Entries under Section 18(1) of the Customs Act, 1962 on the date of presentation and provisionally permitted clearance of the imported Steam Coal for home consumption upon payment of NIL Basic Customs duty and upon payment Countervailing duty (CVD) @1% as tabulated above (including other Cess etc.). 13. Mr. Kurmi contended that upon provisional assessment of the aforesaid 4 Bill of Entries, the finalization of assessment was kept pending in suspended animation sine die for 6 years to 9 years by the Respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Act, 1962 have been issued as yet even after lapse of 10 years (one decade), hence, the demand of duty of Rs 75,76,956/- and Rs. 62,83,824/- aggregating to Rs. 1,38,60,780/- is also not sustainable being hopelessly barred by limitation, and therefore, the Respondent No. 3 committed a serious error by remitting the said matter to the Respondent No. 4 for initiation of a fresh proceeding which is arbitrary, unreasonable and oppressive. 16. Learned counsel for the Revenue submits that M/s. Bihar Foundry Castings Limited., (Unit: Gautam Ferro Alloys) Main Road, Ranchi-834001. Jharkhand, (hereinafter referred to as the 'Petitioner') is an importer and imported Coal through the port of Dhamra. The Petitioner had imported and cleared South African Coal in bulk and classified the same under CTH 27011920 declaring as Steam Coal (Non-Coking) and paid only 1% Additional duty (CVD) leviable under Sub-Section (1) of Section 3 of the Customs Tariff Act, 1975, claiming exemption under Notification No. 12/2012-Cus dated 17.03.2012. The Bills of Entry were assessed provisionally against PD Bond executed by the Noticee. The goods under subject Bills of entry were classified und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of challenge. 18. Against, the other two Bill of Entries No. 158/HC/2012-13 No. 341/HC/2012-13 which are among the four nos. of Bill of Entries under challenge in 1st W.P.(T) No. 4340 of 2022, no show cause notice has yet been issued even after lapse of 10 years from the date of provisional assessment. From record it is further evident that there is delayed finalization of the provisional Bill of Entries No. 158/HC/2012-13, Bill No. 341/ HC/2012-13, Bill No. 260/HC/2011-12 Bill No. 261/HC/2011-12; however, the same is contrary to Para 3.1 of Chapter 7 Provisional Assessment of CBIC Manual of Instructions which is issued by the CBIC in exercise of powers under Section 151A of the Customs Act, 1962 and which is binding on the Respondent. For brevity, the same is quoted herein below: 3. Finalisation of provisional assessment : 3.1 The provisional assessments are expected to be finalized expeditiously, well within 6 months. However, in respect of cases involving machinery contracts or large project imports, where imports take place over long period, such finalisation may take more time since action to can be taken only after all the imports have been made. Here too, effort shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to provisional assessment made after 14-08-2018; hence, in the case at hand it cannot be applied on the provisional assessments of the 4 Bill of Entries as they are made in the year 2012. The limitation for finalization to the case at hand would be governed by Para 3.1 of the CBIC Instruction as per which the finalization of provisional assessment is to be made expeditiously, well within 6 months whereas in the instant case the finalization is done after 6 years to 9 years. The Punjab Haryana High Court in the case of Golden Enterprises Vs. CC reported in 2022 (379) E.L.T 334 (P H) under the Customs Act, 1962 while dealing with similar circumstances following its earlier judgment in the case of Gupta Smelters Pvt. Ltd Vs UOI reported in 2019 (365) ELT 77, M/s GPI Textiles Vs. UOI reported in 2018 (362) ELT 388 (P H) and judgment of the Gujarat High Court in the case of M /s Siddhi Vinayak Syntex Pvt. Ltd Vs. UOI reported in 2017 (352) ELT 455 (Guj) wherein the finalization of provisional assessment after 8-9 years from the date of Bill of Entry was quashed considering that there was no petition by the Petitioner pending before Competent Court nor was any stay of any court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ns dated 20-04-2018 and legality and validity of two Order-in-Original both dated 22-11-2018, both against two Bill Entries i.e. (Bill of Entry No. 260/HC/2011-12 and Bill of Entry No. 261/HC/2011-12 respectively). As discussed herein above; both the impugned Order-in-Originals dated 19-11-2018 are barred by limitation of 6 months under Section 28(9)(a) of the Customs Act, 1962 which Respondent No. 3 failed to appreciate while passing impugned 1st Appellate Order dated 10-08-2022. Due to delayed passing of the Order-in-Originals, entire proceeding right from impugned SCNs dated 20-04-2018 deserves to be quashed and set aside. 24. Having regards to the aforesaid discussions we hold that the 1st Appellate Order dated 10-08-2022 which is challenged along with validity of aforesaid two show cause notices both dated 20-04-2018 and two adjudication Orders, both dated 19-11-2018, under Section 28 [against Bill of Entry No. 260/HC/2011-12 and Bill of Entry No. 261/HC/2011-12 respectively] is not sustainable in the eye of law and legal proposition settled by the Hon ble Apex Court and various High Courts on the ground that both the adjudication orders dated 19-11-2018 are passed after expir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require ingredients of collusion, wilful mis-statement or suppression of facts. In the instant case for absence of collusion, wilful mis-statement or suppression of fact, no penalty under Section 114A have been imposed, hence, extended period of one year is not attracted in the instant case. Further, the mandatory Pre-SCN consultation as mandated under proviso to Section 28(1)(a) of the Customs Act, 1962 read with Pre-Notice Consultation Regulation, 2018 are not complied with while issuing the impugned SCNs both dated 20-04-2018, hence, the subsequent Order-in-Original both dated 19-11-2018 and the impugned 1st Appellate Order dated 10-08-2022 are bad in law being void ab initio and a nullity in the eyes of law. In the Counter Affidavit, the Respondents have not disputed that no Pre-Notice consultation was extended. The Respondent accepts that while issuing the impugned SCN, the Pre-SCN consultation was not done. In the case of Victory Electric Vehicles International Pvt. Ltd Vs. UOI 2022 (382) ELT 597(Del) the Hon ble Delhi High Court while dealing with exactly similar situation under proviso to Section 28(1)(a) of the Customs Act, 1962 held that the provisions of Pre-notice consu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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