Commissioner's delay in adjudication justified due to appellant's non-cooperation and COVID-19 under section 28(9)

CESTAT New Delhi dismissed the appellant's challenge to a show cause notice adjudicated beyond the statutory time limit under section 28(9) of the Customs Act. The tribunal held that the Commissioner provided cogent reasons for the delay, including the appellant's failure to file timely replies, requests for documents, COVID-19 restrictions affecting proceedings, and subsequent procedural delays. The unamended provisions of section 28(9) governed the notice dated 17.10.2017, requiring adjudication within six months or one year depending on circumstances. Since the appellant made no submissions on the merits and only contested the limitation aspect, the tribunal found no infirmity in the Commissioner's order and dismissed the appeals.

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Issues Involved:

1. Whether the adjudication of the show cause notice was time-barred under section 28(9) of the Customs Act, 1962.
2. Whether the amended provisions of section 28(9) of the Customs Act apply retrospectively to the show cause notice issued on 17.10.2017.
3. Justification of the reasons provided by the Commissioner for the delay in adjudication.

Issue-wise Detailed Analysis:

1. Time-barred Adjudication under Section 28(9) of the Customs Act:

The primary contention raised by the appellant was that the adjudication of the show cause notice dated 17.10.2017 was conducted beyond the time limit specified in section 28(9) of the Customs Act, which originally required the determination of duty within six months or one year from the date of notice, depending on the circumstances. The appellant argued that the proceedings should be deemed concluded as if no notice had been issued due to this delay. The Commissioner, however, justified the delay by highlighting that the appellant did not file a reply for a considerable time and sought additional documents, which contributed to the delay. Furthermore, the adjudication was affected by the transfer of the case and COVID-related restrictions, which were considered valid reasons for the delay.

2. Retrospective Application of Amended Section 28(9):

The appellant contended that the amended provisions of section 28(9), which allow for an extension of the adjudication period by a senior officer, should apply retrospectively to the show cause notice issued before the amendment. The appellant relied on the judgment of the Punjab & Haryana High Court in Prabhat Fertilizers and Chemicals Works to support this claim. However, the Commissioner and the Tribunal rejected this contention, citing the substituted Explanation 4, which explicitly states that notices issued prior to the amendment date of 29.03.2018 would be governed by the unamended provisions. The Tribunal also referred to the Delhi High Court's judgment in Swatch Group India Pvt Ltd. vs. Union of India, which clarified that the intention of the legislature was for the unamended provisions to apply to notices issued before the amendment.

3. Justification for Delay in Adjudication:

The Tribunal examined whether the reasons provided by the Commissioner for the delay were justified. The Commissioner noted that the appellant did not file a reply promptly and requested additional documents, which delayed the process. Additionally, the case was transferred between authorities, and COVID-19 restrictions further impacted the timeline. The Tribunal found these reasons to be cogent and sufficient to justify the delay beyond the prescribed period under the unamended section 28(9). The Tribunal concluded that the adjudication was not time-barred due to these circumstances.

In conclusion, the Tribunal upheld the Commissioner's order, dismissing the appeals on the grounds that the adjudication was conducted in accordance with the unamended provisions of section 28(9) and that the reasons for the delay were justified. The Tribunal did not find any merit in the appellant's arguments regarding the retrospective application of the amended provisions or the alleged time-barred nature of the adjudication.

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