Appeal allowed due to invalid notice issuance date.

The Tribunal allowed the appeal, holding that the Supplementary Show Cause Notice issued on 18/5/2017 was not legally sustainable as the authority to issue such a notice was granted only from 29/3/2018.

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Issues Involved:

1. Whether the Department could have issued the Supplementary Show Cause Notice to the Appellant on 18/5/2017 after having issued the normal Show Cause Notice on 26/8/2016Rs.
2. Whether the Supplementary Show Cause Notice issued on 18/5/2017 can be treated as a normal Show Cause NoticeRs.

Summary:

Issue 1: Authority to Issue Supplementary Show Cause Notice
The Appellant challenged the Supplementary Show Cause Notice dated 18/5/2017 on the grounds of lack of jurisdiction, arguing that the second proviso to Section 124 of the Customs Act, 1962, which permits the issuance of such notices, was inserted only on 29/3/2018 by the Finance Act, 2018. The Adjudicating Authority initially upheld the Department's action. However, the Tribunal found that prior to the amendment, Section 124 did not specifically allow for Supplementary Show Cause Notices. The Customs (Supplementary Notice Regulations 2019) further clarified the procedure only from 18/6/2019. Therefore, the Tribunal concluded that the Department was not empowered to issue the Supplementary Show Cause Notice on 18/5/2017, rendering it legally unsustainable.

Issue 2: Nature of the Supplementary Show Cause Notice
The Department argued that the Supplementary Show Cause Notice issued on 18/5/2017 was essentially an independent Show Cause Notice. The Tribunal, however, noted that the notice was explicitly termed as a "Supplementary Notice to Show Cause Notice" and an "Addendum to Supplementary Notice to Show Cause Notice." The Tribunal found that the Adjudicating Authority's attempt to reclassify it as an independent notice was an effort to circumvent the lack of authority to issue a supplementary notice prior to the amendment. Consequently, the Tribunal held that the notice could not be treated as an independent Show Cause Notice and was invalid.

Conclusion:
The Tribunal allowed the appeal, holding that the Supplementary Show Cause Notice issued on 18/5/2017 was not legally sustainable as the authority to issue such a notice was granted only from 29/3/2018. The appeal was pronounced in open court on 03/05/2023.

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