Customs duty recovery upheld after importer wrongly classified goods under incorrect heads claiming improper exemptions

Kerala HC dismissed a writ petition challenging customs duty recovery order. Petitioner wrongly classified imported goods under incorrect customs heads, claiming improper exemptions. Court held the Show Cause Notice issued on 20-4-2022 was within the two-year limitation period under Section 28(9) of Customs Act, 1962, as goods were out of charge on 5-5-2020. Petitioner's objection regarding competent authority issuing SCN was raised for first time before HC and lacked merit. Court found no substance in limitation challenge and dismissed petition, allowing petitioner to approach appellate authority.

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Issues:
Challenge to order-in-original on grounds of jurisdiction and limitation.

Analysis:
The petitioner challenged the order-in-original primarily on two grounds. Firstly, the petitioner argued that the notice was issued by an incompetent authority, the Deputy Commissioner of Customs, which rendered the subsequent order without jurisdiction. Secondly, the petitioner contended that the order was passed beyond the limitation period prescribed under Section 28(9) of the Customs Act, making it void. The petitioner imported Clear Float Glass and claimed a BCD exemption under a specific notification. However, a post-clearance audit revealed a misclassification resulting in a short levy of duty amounting to Rs. 7,17,374.

The Show Cause Notice was issued to the petitioner, who responded but did not raise objections regarding the competence of the issuing authority. A corrigendum was later issued to change the adjudicating authority due to the amount involved. The petitioner raised objections regarding the limitation period for issuance of the notice and the demand for certain bills of entry, but these objections were rejected by the 1st respondent in the impugned order. The respondent held that the goods were wrongly classified, and the exemption claimed was not applicable, rejecting the petitioner's objections on limitation grounds as well.

The High Court judge found that the petitioner's challenges lacked merit. The court noted that the petitioner had not raised the issue of the notice being issued by an incompetent authority before the adjudication authority or in the submissions. The judge emphasized that it was the order-in-original, not the notice, that was challenged, and it was passed by the competent authority. The judge also dismissed the petitioner's argument on the limitation period, stating that the one-year limitation applied in this case. The judge ultimately dismissed the writ petition, allowing the petitioner to appeal the order-in-original while staying the revenue recovery notice for a month if an appeal is filed. The court clarified that any observations made were confined to the two grounds raised in the petition.

In conclusion, the High Court dismissed the writ petition, finding no merit in the petitioner's challenges to the order-in-original based on jurisdiction and limitation grounds. The court allowed the petitioner to appeal the decision while providing a temporary stay on the revenue recovery notice if an appeal is filed.

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