2025 (3) TMI 279 - HC - Customs

SCN quashed for exceeding 90-day limitation period without proof of earlier notice receipt

The Commissioner of Customs Versus T. Shanmugasundaram

The HC quashed a SCN issued by the appellant on grounds it exceeded the 90-day limitation period prescribed in regulations. While a prior SCN dated ... Time limitation to issue SCN - SCN issued by the appellant quashed on the ground that it was issued beyond the limitation period of 90 days proscribed in the Regulation - HELD THAT:- There are no doubt that the show cause notice dated 02.12.2014 issued by the Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit would definitely be qualified to be an offence report. But then, there is nothing on record to show that the appellant was in receipt or was at least in the knowledge of the aforesaid show cause notice dated 02.12.2014. In the affidavit filed in support of the writ petition, the respondent / writ petitioner has no where averred that the authority who issued show cause notice impugned in the writ petition was cognizant of the show cause notice dated 02.12.2014. In A.M.Ahamed and Company Vs. Commissioner of Customs (Imports), Chennai) [2014 (9) TMI 237 - MADRAS HIGH COURT], it was specifically mentioned that copy of the show cause notice issued to the writ petitioner therein on 08.05.2010 was marked to the Commissioner of Customs (Imports), Chennai. In this case, there is nothing on record to show that copy of the show cause notice dated 02.12.2014 was issued to the Commissioner of Customs, Tuticorin. Conclusion - The show cause notice dated 02.12.2014 could qualify as an offence report, but there was no evidence that Shanmugasundaram was aware of this notice. Appeal allowed. The case involves a customs broker, Thiru T. Shanmugasundaram, who was granted a customs broker license by the Commissioner of Customs in Tuticorin. Shanmugasundaram faced allegations of irregularities in the operation of his customs broker branch in Chennai, leading to the prohibition of his operations in Chennai. A show cause notice was issued to him under Regulation 20(1) of Customs Brokers Licensing Regulations, 2013, calling for an explanation as to why his license should not be revoked and penalties imposed. Shanmugasundaram challenged this notice in a writ petition, which was initially allowed by a Single Judge but was appealed by the Commissioner of Customs, Tuticorin.The key issue in the case was whether the show cause notice was issued within the prescribed 90-day period as per Regulation 20(1). The Court considered the interpretation of 'offence report' and the timing of the notice issuance in light of previous judgments. The Court referenced a previous decision by Justice V. Ramasubramanian regarding the definition of 'offence report' and the commencement of the 90-day period for issuing the notice.The Court found that the show cause notice dated 02.12.2014 could qualify as an offence report, but there was no evidence that Shanmugasundaram was aware of this notice. The Court highlighted the importance of the authority being in receipt or knowledge of the offence report for the 90-day period to commence. Unlike previous cases where the notices were issued after the expiry of 90 days, in this case, there was no evidence of the notice being time-barred. Therefore, the Court held that the Single Judge erred in allowing the writ petition, and the appeal by the Commissioner of Customs was allowed.In conclusion, the Court set aside the Single Judge's order and allowed the writ appeal, leaving the issue of limitation open. The Court did not award any costs and closed the connected miscellaneous petition.