2023 (12) TMI 916 - AT - Customs

Gold bars seized under Advance Authorisation Scheme cannot be provisionally released after final adjudication orders

M/s Parekh Industries Ltd. Versus Commissioner of Customs (Export), ACC Mumbai

The CESTAT Mumbai dismissed an appeal for provisional release of seized gold bars imported under Advance Authorisation Scheme exemption. The appellants ... Provisional release of the seized goods - appellants were availing exemption from payment of customs duty on import of Gold bars under Advance Authorisation Scheme - HELD THAT:- From the perusal of the legal provisions of the Customs Act, 1962, it transpires that ‘the proper officer’ under Section 110(1) ibid, if he has reason to believe that any goods are liable to confiscation, then he may seize the goods. In terms of sub-section (2) to Section 110 ibid, a Show Cause Notice (SCN) in respect of the seized goods is required to be given within a period of 6 months to the person from whose position the goods were seized. For any reasons to be recorded in writing, such period of 6 months may be extended to another 6 months’ time by competent authority specified therein. It is also provided that this time limit does not apply in cases where the goods have already been released to the goods. However, CBIC in its instructions No.1/2017-Customs dated 08.02.3017 had required that the field formations shall adhere to the time limits prescribed under Section 110(2) ibid, irrespective of the fact that whether goods remain seized or are provisionally released. For cases to be adjudicated within the competence of Principal Commissioner/ Commissioner of Customs or an Addl./ Joint Commissioner of Customs, one year from the date of service of the SCN has been fixed as the outer time limit; for the authorities below, namely Asst./Dy. Commissioners and other gazetted officers, the time limits have been fixed as 6 months and 3 months, respectively. Further, in cases where such time limits could not be adhered to by an adjudicating authority, due to circumstances that prevented from observing that time limits, then the supervisory officer has been asked to fix appropriate timeframe for disposal and monitoring of such cases. On analysis of the legal provisions contained in Section 110 (A) ibid, and in view of the development in the pending show-cause proceedings before the Commissioner of Customs- IV (Export), the appeal for provisional release of goods has become infructuous on account of final orders having been passed on the show cause notices issued in respect of such seizure of goods. The appeal filed by the appellants has become infructuous inasmuch as the SCNs issued by the department had already been adjudicated. Hence, the present appeal filed before the Tribunal for unconditional release of the seized goods cannot be considered - appeal dismissed. Issues Involved:1. Provisional release of seized goods.2. Adjudication of show cause notices.3. Refund of IGST.4. Registration of MEIS duty credit scrips.Summary:1. Provisional Release of Seized Goods:The appellants sought unconditional release of seized goods without security, challenging the provisional release conditions set by the Commissioner of Customs (Export), Air Cargo Complex, Mumbai. The Tribunal examined the legal provisions under Sections 110 and 110A of the Customs Act, 1962, which allow for the seizure of goods suspected of being liable to confiscation and their provisional release on bond and security. The Tribunal noted that show cause notices (SCNs) were issued within the statutory period, and the goods were provisionally released as per the legal framework. However, as the SCNs were adjudicated during the appeal's pendency, the Tribunal determined that the appeal for provisional release had become infructuous.2. Adjudication of Show Cause Notices:The Tribunal acknowledged that the SCNs dated 01.07.2022 and 05.07.2022 were issued concerning the seized goods and other alleged violations under the Customs Act. The Commissioner of Customs-IV (Export) adjudicated these SCNs, issuing an Order-in-Original on 06.10.2023. Given this adjudication, the Tribunal concluded that the appeal concerning the provisional release of goods was rendered moot.3. Refund of IGST:The High Court directed that the appellants' claim for IGST refunds, which were outside the scope of the SCNs, should be decided by the concerned authorities independently. The Tribunal did not address this issue directly, as it was not within its immediate purview.4. Registration of MEIS Duty Credit Scrips:Similarly, the claim for the registration of MEIS duty credit scrips was to be decided by the relevant authorities, as directed by the High Court. The Tribunal did not consider this issue in its judgment.Conclusion:The Tribunal dismissed the appeal as infructuous due to the adjudication of the SCNs, which resolved the matter of the provisional release of the seized goods. The issues of IGST refund and MEIS duty credit scrip registration were left to be decided by the appropriate authorities as per the High Court's directions. The Tribunal's decision was pronounced in open court on 19.12.2023.