2025 (3) TMI 1146 - AT - Customs

Section 110(2) of Customs Act 1962 not retroactive; goods seized in 2016 must be released unconditionally.

The Tribunal ruled that the amended provisions of Section 110(2) of the Customs Act, 1962, introduced by the Finance Act, 2018, do not apply ... Seeking provisional release of detained imported goods - Mulberry Raw Silk - detention on the ground that the documents pertaining to said goods were not available with the caretaker of the premises - HELD THAT:- The provisions of Section 110(2) of the Customs Act, 1962 came into effect on 29.03.2018 and at the seizure of the goods in question and release thereof, the said provisions were not in force. In that circumstances, the Revenue cannot rely on the amended provisions in 2018 for the release of the goods in 2016 provisionally. Therefore, the Revenue is duty bound to issue the show-cause notice within extended period of six months by the ld.Commissioner (Port), which they failed to do so. The observations made by the ld.Commissioner (Appeals) in the impugned order not agrred upon and no show-cause notice was issued to the respondent within extended period of six months in terms of Section 110(2) of the Customs Act, 1962 as existed at the time of seizure of the goods - no proceeding is sustainable against the respondent and they are entitled to release of the goods, the personal Bond and Bank guarantee. Conclusion - The respondent is entitled to the unconditional release of the goods and the return of the Bank Guarantee due to the Revenue's failure to issue a Show Cause Notice within the stipulated period. The appeal filed by the Revenue is dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment are as follows: Whether the amended provisions of Section 110(2) of the Customs Act, 1962, as introduced by the Finance Act, 2018, apply retrospectively to the provisional release of goods seized in 2016. Whether the Revenue's failure to issue a Show Cause Notice within the extended period makes the respondent eligible for the unconditional release of goods under the pre-amendment provisions of Section 110(2) of the Customs Act, 1962.ISSUE-WISE DETAILED ANALYSIS1. Applicability of the Amended Provisions of Section 110(2) of the Customs Act, 1962 Relevant Legal Framework and Precedents: Section 110(2) of the Customs Act, 1962, as amended by the Finance Act, 2018, states that the six-month period for issuing a Show Cause Notice does not apply where an order for provisional release of seized goods has been passed. Court's Interpretation and Reasoning: The Tribunal noted that the amended provisions came into effect on 29.03.2018, after the provisional release of the goods in 2016. Therefore, the amended provisions could not be applied retrospectively to the case at hand. Key Evidence and Findings: The Tribunal considered the timeline of events, specifically the provisional release of goods in 2016 and the subsequent failure of the Revenue to issue a Show Cause Notice within the extended period. Application of Law to Facts: The Tribunal determined that the amended provisions were not applicable to the case, as they were not in force at the time of the provisional release. Treatment of Competing Arguments: The Revenue argued for the applicability of the amended provisions, but the Tribunal rejected this argument due to the timing of the amendment's enactment. Conclusions: The Tribunal concluded that the amended provisions of Section 110(2) could not be applied to the 2016 provisional release.2. Eligibility for Unconditional Release of Goods Relevant Legal Framework and Precedents: Under the pre-amendment Section 110(2) of the Customs Act, 1962, the Revenue was required to issue a Show Cause Notice within six months, extendable by another six months, failing which the goods must be released unconditionally. Court's Interpretation and Reasoning: The Tribunal agreed with the Commissioner (Appeals) that the Revenue's failure to issue a Show Cause Notice within the extended period necessitated the unconditional release of the goods. Key Evidence and Findings: The Tribunal reviewed the correspondence and timeline, noting the respondent's repeated requests for release of the Bank Guarantee after the expiration of the extended period without a Show Cause Notice. Application of Law to Facts: The Tribunal applied the pre-amendment provisions of Section 110(2) and determined that the respondent was entitled to the release of goods, the personal bond, and the Bank Guarantee. Treatment of Competing Arguments: The Tribunal found no merit in the Revenue's argument that the extension of time for issuing a Show Cause Notice was valid under the amended provisions. Conclusions: The Tribunal concluded that the respondent was entitled to the unconditional release of the goods and the return of the Bank Guarantee.SIGNIFICANT HOLDINGS Verbatim Quotes of Crucial Legal Reasoning: 'The said provisions came into effect on 29.03.2018 and at the seizure of the goods in question and release thereof, the said provisions were not in force.' Core Principles Established: The Tribunal established that legal amendments cannot be applied retrospectively unless explicitly stated, and procedural requirements existing at the time of the event must be adhered to. Final Determinations on Each Issue: The Tribunal upheld the Commissioner (Appeals)'s decision, affirming that the respondent was entitled to the unconditional release of the goods and the return of the Bank Guarantee due to the Revenue's failure to issue a Show Cause Notice within the stipulated period.