Extended limitation under Section 28(1) fails as burden of proof unmet in Patchouli Oil undervaluation case

SC upheld the CESTAT order exonerating the importer from allegations of mis-declaration and undervaluation of Patchouli Oil PS 24. It was affirmed that the Department failed to discharge its burden of proving that the goods were mis-declared or undervalued, a prerequisite for invoking the extended period of limitation under Section 28(1) of the Customs Act. Consequently, the demand of differential duty based on extended limitation was held unsustainable in law. Finding no perversity or legal error in the CESTAT's reasoning, the SC dismissed the revenue's civil appeals.

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The Supreme Court condoned the delay in filing the civil appeals, stating, "Delay condoned." The appeals challenged a High Court order that had relied on the decision in *M/s. Skypack Commissioner Pvt. Ltd. vs. Commissioner of Customs (Preventive), Kolkata*, decided by CESTAT, Kolkata, under final Order Nos. 75558-75559 of 2024 dated 21.03.2024 in Customs Appeal No. 70021 of 2013. The Court noted that the CESTAT judgment relied upon by the High Court "has attained finality." Upon hearing counsel for the appellant, the Court held that there was "no good ground to interfere with the impugned order" of the High Court. Consequently, the civil appeals were dismissed, thereby affirming the High Court's reliance on the final CESTAT decision. The Court further directed that all pending applications, if any, "shall stand disposed of."

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