Validity of SCN time limitation under Customs Act: one-year statutory deadline mandatory, post-directive SCNs time-barred

Validity of show cause notices issued under the Customs Act was examined with primary focus on the temporal jurisdiction conferred by Section 28. The court considered that proceedings initiated under the provision permitting action for duty not levied or erroneously refunded must be completed within the statutory timelines; the one-year closure requirement in subsection (9) was rendered mandatory by amendment, and where that maximum period has expired the authorities lack jurisdiction to adjudicate further, with Board directions preserving only those notices that are demonstrably the same matter and issued within their scope.

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Issues Involved:
1. Validity of show cause notices (SCNs) issued under Section 28(4) of the Customs Act, 1962.
2. Jurisdiction of Customs authorities post the expiry of the period prescribed under Section 28(9) of the Act.
3. Impact of Supreme Court judgment in Canon India Private Limited v. Commissioner of Customs on the SCNs.
4. Applicability of directives issued by the Central Board of Indirect Taxes and Customs (CBIC) in light of the Canon India judgment.

Summary of Judgment:

1. Validity of SCNs Issued Under Section 28(4) of the Customs Act, 1962:
The petitions challenged the SCNs primarily on the ground that the period for completion of proceedings as prescribed in Section 28(9) of the Act had expired, thereby nullifying the jurisdiction of the authorities to adjudicate upon the same.

2. Jurisdiction of Customs Authorities Post Expiry of the Period Prescribed Under Section 28(9):
The Court noted that the SCNs issued against the petitioners were dated post the directives of the CBIC and were issued by competent jurisdictional Commissionerates. The statutory timelines set out in Section 28(9) mandated that proceedings be brought to a close within one year from the date of the notice, which was not done in this case.

3. Impact of Supreme Court Judgment in Canon India Private Limited v. Commissioner of Customs:
The judgment in Canon India held that the Directorate of Revenue Intelligence (DRI) officers were not "proper officers" to issue SCNs under Section 28(4). The Court observed that this ruling did not impact the jurisdiction of Customs authorities to initiate proceedings under Section 28(4) or to conclude them.

4. Applicability of Directives Issued by the CBIC in Light of the Canon India Judgment:
The Court examined the CBIC directives dated 17 March 2021 and 16 April 2021, which directed SCNs issued by DRI officers to be kept pending. The Court found that these directives did not apply to the SCNs issued by the jurisdictional Customs authorities against the petitioners. The directives were specific to SCNs issued by DRI officers and did not place a cloud on the authority of Customs officers to proceed under Section 28(4).

Conclusion:
The Court concluded that the SCNs issued against the petitioners did not fall within the ambit of Section 28(9A)(c) and the directives of the CBIC. Since the period prescribed under Section 28(9) had expired, the proceedings could not survive in law. Consequently, the SCNs were quashed and set aside.

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