2019 (10) TMI 181 - AT - Customs

Commissioner cannot extend time limit for issuing Show Cause Notice without due process.

The Tribunal held that the Commissioner cannot extend the time limit for issuing a Show Cause Notice (SCN) under Section 110(2) of the Customs Act, 1965, ... Extension of time limit for issuance of SCN - Seizure of goods - principles of natural justice not followed - Section 110(2) of the Customs Act, 1962 - HELD THAT:- The issue covered in the decision in the case of M/S RAJKAMAL INDUSTRIAL PVT LTD VERSUS C.C. -KANDLA [2019 (6) TMI 169 - CESTAT AHMEDABAD] where it was held that there is no legal authority with the department for dispensing with the issuance of SCN to the appellant, therefore, the impugned order passed without issuance of any SCN will not sustain We have dealt with the position of law even post amendment and it was held that it is necessary to issue SCN on the part of the Commissioner for extension of time limit in issuance of SCN under Section 110(2) - In the facts of the present case also neither any SCN was issued nor any hearing was given. The period of six months has already been expired, therefore, the impugned order extending time limit for issuance of SCN in the matter of seizure of the goods being passed without following the principles of natural justice will not sustain. Appeal allowed - decided in favor of appellant. Issues Involved:1. Whether the Commissioner can extend the time limit for issuance of SCN under Section 110(2) without following the principles of natural justice.Issue-Wise Analysis:Extension of Time Limit for Issuance of SCN Without SCN:The primary issue in this case was whether the Commissioner could extend the time limit for the issuance of a Show Cause Notice (SCN) under Section 110(2) of the Customs Act, 1965, without issuing an SCN and providing a hearing to the person from whom the goods were seized. The appellant argued that the Commissioner did not issue an SCN before passing the order to extend the time limit, making the order unsustainable. The respondent, on the other hand, contended that the Commissioner had the legal authority to extend the time limit under Section 110(2) and that the order was legal and correct.Reference to Previous Judgments:The Tribunal referred to the case of Rajkamal Industries (P) Ltd., where it was decided that the Commissioner must issue a notice to the importer proposing an extension of the time limit for the issuance of an SCN. The Tribunal also cited the case of Principal Commissioner of Customs vs. Beauty Gem, where the Bombay High Court held that the Commissioner could not extend the time without recording satisfaction based on material evidence that the investigation was being pursued seriously and required more time. The High Court emphasized that merely delaying the investigation was not a sufficient ground for extending the time limit.Principles of Natural Justice:The Tribunal noted that in previous judgments, such as Gaunir Impex Pvt. Ltd., even when an SCN was issued for extending the time limit, the courts held that the department had not followed the principles of natural justice. In the present case, no SCN was issued, and the Commissioner did not record reasons properly in the order. The Tribunal also referred to the case of M/s Swees Gems & Jewellery, where it was concluded that even after the amendment to Section 110(2), the issuance of an SCN was necessary.Requirement of Issuance of SCN Post Amendment:The Tribunal analyzed the amended provisions of Section 110(2) and concluded that the amendment did not eliminate the requirement for issuing an SCN. The Tribunal cited the case of S.R.K. Metal & Industries & Pink Commercial, where it was held that the affected party must be given an opportunity to be heard before the extension of the time limit. The Tribunal emphasized that the principles of natural justice require that the person from whom the goods were seized must be informed and given an opportunity to present their case.Conclusion:The Tribunal concluded that the impugned order, which extended the time limit for the issuance of an SCN without issuing an SCN and without following the principles of natural justice, was not sustainable. The Tribunal set aside the impugned order and allowed the appeal with consequential reliefs, including the return of the seized goods to the person from whom they were seized.Summary:The Tribunal held that the Commissioner could not extend the time limit for the issuance of an SCN under Section 110(2) of the Customs Act, 1965, without issuing an SCN and providing a hearing to the affected party. The Tribunal emphasized the importance of following the principles of natural justice and cited previous judgments to support its decision. The impugned order was set aside, and the appeal was allowed with consequential reliefs.