2026 (2) TMI 302 - AT - Customs

Import of cold rolled stainless steel coils: goods ordered released as seizure vacated due to sixmonth statutory time bar.

Failure to issue a show cause notice within the statutory sixmonth seizure period bars adjudication under the seizure time limit, so the seizure is ... Violation of Provisions of Section 110 - Compliance with the mandatory return of goods - SCN within six months - Waiver of Show Cause Notice and its effect on the six month limitation - Adjudication post expiry of statutory seizure period is void/without jurisdiction - goods description, ‘Cold Rolled Stainless Steel Coils Grade J2’ imported from China on the basis of House bill of lading - Release of goods (in rem relief) distinct from in personam proceedings against persons - circumvention of circular of Ministry of Steel - Restriction by departmental circular without statutory authority - Waiver of Show Cause Notice and its effect on the six month limitation - HELD THAT:- We find that the decision in respect of goods cannot be faulted with in the instant case and the seizure gets vacated if show cause notice is not issued within the statutory limits of six months provided in Section 110. The view is fortified by the decision in the matter of Deepak Natwarlal Soni [2018 (9) TMI 1912 - GUJARAT HIGH COURT]. It is thus clear that even when show cause notice is waived in view of the decision of Hon’ble Delhi High Court in M/s. Shiv Shakti [2016 (4) TMI 408 - DELHI HIGH COURT] the proceedings are required to be more expeditiously concluded and adjudication cannot be delayed beyond six months and the waiver given will no more be binding after expiry of the time limit under Section 110 of the Act. We, therefore on this point find no infirmity in the order of the Commissioner (Appeals) in giving relief to the party. Release of goods (in rem relief) distinct from in personam proceedings against persons - HELD THAT:- There is nothing on record to show that BIS standards have been applied for the above goods which can only be prescribed under laid down procedure under World Trade Organization (W.T.O.) in relation to technical standards to be prescribed on the principles of equal treatment to all the countries at the import point as well as National Treatment. The same needs to be notified by following due process by making them available on a designated website to various countries. Firstly, the Advocate submitted that the control order does not cover ‘Cold Rolled Coils of Stainless Steel Grade J2’. Secondly, even if, the above circulars placed additional restriction of getting NOC from the Ministry of Steel for the kind of grade which has been imported and whether the same was covered with the requirement of BIS standards. Same it, therefore meant that the restrictions placed by the law i.e. Steel & Steel products (Control) Order were being extended by way of aforesaid circulars by the mandate of executive, without there being such restrictions in law. In fact, customs is itself calling such unwarranted procedures as restrictions/prohibitions. It is thus clear that the goods are not prohibited and are liable to be released in India as the Learned Commissioner (Appeals) has ordered. We therefore, find no infirmity in the order but are refraining from pronouncing on whether the Circular by the Ministry of Steel was issued under due authority of law or extended the scope of the restrictions without the statutory authority. While department emphasized that action in personam will still survive, after release of goods. We find that it can only be pressed by the department, if it finds tangible violations of some law prescribing and making such imports restricted and prohibited only on the basis of BIS standards or a statutory Control Order and not without such conclusion. Appeal by the department is therefore dismissed. Miscellaneous application also disposed of. Goods to be released within 10 days of the receipt of order. Appeal dismissed. Issues: Whether the adjudication order passed after the expiry of the six-month period from the date of seizure (Section 110(2) of the Customs Act, 1962) is without jurisdiction and whether the seized goods must be returned/released to the importer.Analysis: The Tribunal analysed the undisputed timeline: goods seized on 27.02.2025; the importer and broker waived issuance of a show cause notice on 25.04.2025 to expedite adjudication; no notice under Section 124 was issued within six months; no extension was sought or granted by the competent authority before the expiry of the six-month period; adjudication order was passed on 06.11.2025, i.e., after the six-month statutory period lapsed. The Tribunal applied binding precedent that a waiver of the right to receive an SCN does not absolve the department of the obligation to complete adjudication within the reasonable period (six months). Failure to issue a notice within six months renders the seizure illegal and the department loses authority to continue holding the goods; subsequent adjudication resting on such seizure is a nullity. The Tribunal therefore confined its decision to this preliminary legal ground and did not decide the merits regarding the Ministry of Steel circulars, NOC validity, or distinctions between house and master bills of lading.Conclusion: The adjudicating order dated 06.11.2025, having been passed after the expiry of the six-month period from the date of seizure, is without jurisdiction and set aside. Consequentially, confiscation, redemption fine and penalties imposed are set aside and the goods are ordered to be released/returned to the importer.