2026 (3) TMI 1093 - AT - Customs

Limitation period bars show cause notices issued after statutory time; delayed demand proceedings are time barred and dropped.

Whether a show cause notice can be sustained where imported goods exempted under a notification were not re exported within six months: the statutory ... Limitation for issuance of show cause notice - re-export requirement for concessional duty - statutory or procedural limitation for issuance of a show cause notice - time barred - goods imported under Notification No. 32/1997-C. Validity of the show cause notice issued after a delay in relation to imports availing concessional duty subject to re-export condition - HELD THAT:- The Tribunal recorded that although certain consignments were not re-exported within the six month period and no extension had been sought, the goods had in fact been re exported. The determinative finding was that the show cause notice was issued after the one year limitation period and, being issued after more than three years, was time barred. Consequently the delay in issuance rendered the demand invalid despite the earlier non compliance with the six month re export condition. [Paras 7, 8] The show cause notice was time barred and the impugned order upholding the Commissioner(Appeal)'s dropping of proceedings is upheld. Final Conclusion: The appeal is dismissed; the impugned order is upheld because the show cause notice was issued beyond the one year limitation period and thus was time barred, notwithstanding that some consignments were not re exported within six months. Issues: Whether the order of the Commissioner (Appeals) dropping adjudication proceedings was sustainable where the imported goods, which had availed exemption under Notification No. 32/1997-C dated 01.04.1997, were not re-exported within six months and no extension was sought, but a show cause notice was issued after more than one year.Analysis: The factual matrix shows the goods imported under Notification No. 32/1997-C dated 01.04.1997 were ultimately re-exported though not within the six-month period for 11 bills of entry and no extension of time had been sought. The statutory or procedural limitation for issuance of a show cause notice applies; the notice impugned was issued after more than three years from the relevant imports and therefore falls outside the one-year limitation period for initiating demand proceedings. Given the delay, the issuance of the show cause notice was time barred notwithstanding non-compliance with the six-month re-export condition at the earlier point in time.Conclusion: The Commissioner (Appeals) order dropping the proceedings is upheld and the revenue appeal is dismissed; decision is in favour of the assessee.