Show cause notices under the Customs Act and retroactive amendment to adjudication limitation led to vacation of time-barred notices.

Retroactive amendment to procedural limitation was applied to show cause notices issued before the amendment date, requiring adjudication within one year from the retroactive operative date; notices adjudicated after that period were treated as time-barred and vacated. The tribunal followed higher court rulings upholding retroactivity and dismissal of departmental challenges, resulting in allowance of appeals. Secondary issues noted include reassessment versus self-assessment, recovery of duties, admissibility of electronic records and compliance with statutory record-keeping, and consequences for mis-declaration including penalty and confiscation, though these did not survive the limitation bar.

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Issues: Whether the show cause notices dated 07.10.2016 (adjudicated on 28.05.2019) stand vacated as lapsed under Explanation 4 to Section 28 of the Customs Act, 1962 in view of the amendment to Section 28(9)/(9A) w.e.f. 29.03.2018.

Analysis: Section 28 as amended (w.e.f. 29.03.2018) prescribes a one-year timeline (with limited extensions) for determination of duty in cases under sub-section (4), and Explanation 4 was enacted to address applicability to pre-amendment notices. The legal question requires application of the amended time-limit to pending show cause notices issued prior to 29.03.2018. Relevant authority of the jurisdictional High Court (as clarified on review) and subsequent dismissal of the Department's challenge before the Supreme Court establish that the amendment operates retroactively for pending notices (treating them as if issued on the amendment date) such that, unless a permitted extension or a ground under sub-section (9A) was properly invoked and communicated, a show cause notice not adjudicated within the prescribed period is deemed concluded. The admitted chronology in this case shows the show cause notice was issued on 07.10.2016 and adjudication was completed on 28.05.2019, with no record of any valid extension under the amended provisions or invocation of sub-section (9A) reasons; the appointment of a common adjudicating authority and later adjudication do not cure the statutory lapse where the statutory timeline (as applied retroactively) had expired.

Conclusion: The show cause notices dated 07.10.2016 stood vacated as lapsed under Explanation 4 to Section 28 of the Customs Act, 1962 and the impugned adjudication dated 28.05.2019 is set aside; the appeals are allowed in favour of the appellants (assessee).

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