2025 (12) TMI 1089 - HC - Customs

Customs duty show-cause notice u/s28-extension of adjudication time not communicated to importer upheld; writ rejected

The dominant issue was whether adjudication of a customs SCN issued under s. 28 of the Customs Act was vitiated because an extension of time for passing ... Challenge to delayed adjudication of the SCN - import of Aluminium foil - availment of of exemption benefit of preferential rate of duty by submitting Certificates of Origin (COO) from Malaysia and Thailand under the ASEAN–India Free Trade Agreement, in terms of N/N. 46/2011-Cus dated 01st June, 2011 - extension order was not communicated to the Petitioner - HELD THAT:- Though this Court permitted the adjudication of the SCN, apart from filing the request for supply of RUDs, which has also been dealt with in the Order-in-Original, no reply on merits has been filed by the Petitioner to the SCN. In fact, there ought to have been a reply refuting the email received by MITI by the Petitioner if the Petitioner’s contention is that the COOs are valid and genuine, which the Petitioner did not even file. The Punjab & Haryana High Court in M/S. SHRI RAM AGRO CHEMICALS PVT. LTD VERSUS UNION OF INDIA AND OTHERS [2019 (10) TMI 1401 - PUNJAB AND HARYANA HIGH COURT] has drawn a parallel between Section 110 and Section 28 of the Customs Act. In the opinion of this Court, there is a difference in the scheme of the Act in Section 110 of the Customs Act, 1962 and Section 28 of the Customs Act, 1962. Under Section 28(9) of the Customs Act, 1962, an extension can be granted, however, there is no stipulation that the same extension order ought to be communicated. Whereas, under Section 110(2) of the Customs Act, 1962, the stipulation is that the person, from whom the goods were seized, has to be informed before the expiry of the period, if a further extension is to be given. Thus, these two provisions are not identical in nature. Further, this Court is of the opinion that usually, the Customs Department ought to intimate any extension which is granted, to the parties concerned. But this would not be a fatal error in the present case as the communication of the same is not mandated in the provision, i.e., Section 28 of the Customs Act, 1962. The Petitioner has failed to make out any case for interference. The Order-in-Original dated 18th March, 2025 is an appealable order. Since an interim order was passed by this Court, the Petitioner is permitted to file an appeal within a period of one month from today, before the Commissioner of Customs (Appeals). Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether adjudication pursuant to the SCN was barred under Section 28(9) of the Customs Act, 1962 on the ground that the order was not passed within one year and the extension, if any, was not communicated to the noticee. (ii) Whether non-communication of an extension granted under Section 28(9) is a fatal defect requiring the Court to interdict adjudication and/or set aside the adjudication outcome. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i) & (ii): Effect of non-communication of extension under Section 28(9) on validity of adjudication Legal framework (as discussed by the Court): The Court examined Section 28(9) of the Customs Act, 1962, including its proviso permitting an officer senior in rank to extend the adjudication period, and contrasted it with Section 110(2), which expressly requires that the person from whom goods were seized be informed before expiry of the period if extension is granted. Interpretation and reasoning: The Court found that the statutory schemes of Section 28(9) and Section 110(2) are not identical. While Section 110(2) contains an explicit stipulation to 'inform the person' before expiry of the specified period when extending time, Section 28(9) contains no such stipulation mandating communication of the extension order to the noticee. On that construction, the Court held that absence of intimation/communication of the extension order does not, by itself, invalidate the continuation or completion of adjudication under Section 28(9). The Court also noted, as a matter of fairness and administrative propriety, that the Department 'ought to intimate' any extension, but treated non-intimation as non-fatal because the statute does not mandate it. Conclusions: The Court concluded that the petitioner failed to establish a ground for interference on the basis of non-communication of the extension. Since communication is not mandated by Section 28(9), adjudication was not vitiated merely because the extension order was allegedly not intimated. Consequently, no writ interference was warranted, especially where an appealable adjudication order had been passed and the petitioner had not substantively contested the SCN on merits before the adjudicating authority. Relief and directions flowing from the conclusions: The Court declined to interdict the adjudication and held that the adjudication order is appealable. It permitted filing of an appeal within one month, directing that if filed within that period it shall not be treated as time-barred and shall be decided on merits; all rights and contentions were left open.