Extended limitation under customs law can bind a transferee where the original licence was obtained through wilful misdeclaration.

Customs authorities may invoke the extended period of limitation under the proviso to Section 28 of the Customs Act where the original licence holder made a wilful misdeclaration and suppressed material facts to secure transferability of the licence. The suppression of Modvat credit availed under Rule 57A of the Central Excise Rules, 1944, was treated as deliberate and sufficient to justify extended limitation. That consequence also applied to the transferee of the licence, so recovery of duty was not barred by time. The article notes that the extended period was correctly invoked and the appeals failed.

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Issues: Whether the customs authorities could invoke the proviso to Section 28 of the Customs Act, 1962, to apply the extended period of limitation against the transferee of a licence.

Analysis: The original licence holder had deliberately suppressed the fact of availing Modvat credit under Rule 57A of the Central Excise Rules, 1944, and had made a wilfully wrong declaration to secure transferability of the licence. On that basis, the authorities were entitled to invoke the extended period of limitation for recovery of duty, and that consequence applied even to the appellant as transferee of the licence.

Conclusion: The extended period of limitation was correctly invoked, and the appeals failed.

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