2026 (2) TMI 194 - AT - Customs

Time-barred show cause notice in provisional import assessment struck down; appeal allowed and consequential relief granted.

A show cause notice issued after the normal limitation period in a provisional import assessment was held time-barred; the tribunal set aside the notice ... Time barred - limitation - extended period under Section 28(4) - Show Cause Notice under Section 124 - provisional assessment - first check - classification of goods - Tariff Heading / CTH - burden of proof on the Revenue - mis-declaration / suppression / fraud - confiscation u/s 111(m) - penalty u/s 112(a) and 114A - interest u/s 28AA - Accessories (Condition) Rules, 1963 - HELD THAT:- We find that a coordinate Bench of this Tribunal in Dr. Rai Memorial Cancer Institute [2022 (2) TMI 153 - CESTAT CHENNAI], examined the import of a similar ‘True Beam’ Linear Accelerator, which was also subject to examination before clearance and struck down the SCN for having been issued beyond the normal period. Even in the case of MIOT Hospitals [2023 (9) TMI 464 - CESTAT CHENNAI] related to the import of Linear Accelerator where the appellant had not challenged the department’s classification, it was found that the appellant had declared all particulars and merely because of a change in classification by the department, redemption fine and penalty could not be imposed. This also support the submission of the appellant that there was a genuine dispute on classification prevalent during the said time. Having found the SCN time-barred, we do not feel it necessary to examine the judgments supporting the case on classification, fine, penalty etc. submitted by revenue. In the circumstances we find that the SCN has been issued beyond the normal period and is hence liable to be struck down on that score. We hence do not examine the issue on merits in the light of the Constitutional Court judgments in B.V. Jewels [2004 (9) TMI 104 - SUPREME COURT] and Monsanto Manufacturer [2014 (4) TMI 505 - ALLAHABAD HIGH COURT] Accordingly, we set aside the impugned order and allow the appeal. The appellant is eligible for consequential relief as per law. The appeal is disposed of accordingly. Issues: (i) Whether the show cause notice and consequent demand issued beyond the normal period of limitation (time-bar) is liable to be struck down.Analysis: The proceedings concern an allegation of incorrect classification and invocation of the extended limitation under Section 28(4) of the Customs Act, 1962. Relevant legal principles include that a show cause notice must set out specific allegations so the recipient can meet them, and that if a demand is found to be time-barred the tribunal need not examine merits. Factual material shows the goods underwent physical examination and were finally assessed and cleared following a first-check appraisal and duty payment more than one year before issuance of the show cause notice. The content and framing of the notice do not raise the substantive point relied upon later by the department; procedural defects in the notice and issuance beyond the normal period render the notice vulnerable to challenge. Coordinate decisions addressing similar imports and the settled proposition that limitation, when validly raised, precludes adjudication on merits are applicable.Conclusion: The show cause notice and consequential demand are time-barred and are set aside; appeal allowed in favour of the importer-assessee.