Customs duty short-levy recovery is time-barred after limitation, and recovery cannot bypass statutory procedure.

Customs duty short-levy cannot be recovered from a clearing agent after expiry of the statutory limitation under the Customs Act, 1962. Although imported goods are liable to duty under Section 12, recovery of any non-levied duty must follow the notice and show-cause procedure in Section 28 within six months from the relevant date. Section 147 does not allow the Department to bypass that limitation. Once the statutory period expires, the demand is time-barred, and adjustment from a deposit account without following the prescribed procedure is unlawful.

---

---

Issues: Whether customs duty short-levied could be recovered from the clearing agent after expiry of the statutory period under the Customs Act, 1962, and whether the customs authorities could adjust the amount from the petitioners' deposit account without following the procedure prescribed by law.

Analysis: Article 265 of the Constitution of India permits levy and collection of tax only under authority of law. Under Section 12 of the Customs Act, 1962, imported goods are liable to customs duty, but where duty has not been levied, Section 28 requires notice to be served within six months from the relevant date and the prescribed show-cause procedure to be followed. Section 147 permits recovery from an agent in certain circumstances, but such recovery remains subject to Section 28. Once the statutory period under Section 28 expires, the demand becomes time-barred and the Department cannot bypass the Act by resorting to the general law. The earlier Sea Customs Act provisions were read in the same manner, supporting the view that both the remedy and the liability to recover the short levy lapse after limitation.

Conclusion: Recovery from the petitioners was not permissible after expiry of the statutory period, and the adjustment made by the customs authorities was illegal. The petitioners succeeded on the substantive issue.

---