Pending warehousing extension request must be decided first before adjudication, with natural justice fully observed.

Where an assessee's request for extension of the warehousing period was still pending, adjudication on a demand order without first deciding that application was treated as procedurally unfair. The record showed that the extension request had been made after expiry of the initial warehousing period, and the applicable Customs circular allowed such requests to be considered even after expiry in appropriate cases. The impugned order was set aside and the matter was remanded to the original adjudicating authority for fresh adjudication after deciding the extension application and following the principles of natural justice.

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Issues: Whether the order-in-original could be sustained when the assessee's application for extension of the warehousing period had not been decided before adjudication.

Analysis: The appellant had sought extension of the warehousing period after the initial period had expired, and the record showed that no formal decision had been taken on that request before the adjudicating authority passed the demand order. The relevant Customs circular permitted consideration of such requests even after expiry of the warehousing period in appropriate circumstances. In these circumstances, adjudication without first deciding the pending extension request was treated as unfair and contrary to procedural fairness.

Conclusion: The impugned order was set aside and the matter was remanded to the original adjudicating authority for fresh adjudication after deciding the application for extension of the warehousing period and after observance of the principles of natural justice.

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