Customs jurisdiction and limitation notice rules defeat invalid demand, while separate imports of VCR parts did not prove conspiracy.

A customs demand notice invoking the extended limitation period must be issued by the authority competent under the law in force on the date of issue, and a later amendment does not retrospectively cure absence of jurisdiction unless it clearly so provides; a notice issued by an Assistant Collector was therefore invalid. Import of components and sub-assemblies of a VCR at different times was not, by itself, enough to establish an unlawful import scheme or conspiracy where import of such parts was not shown to be prohibited. Territorial adjudicatory power under the Customs Act is confined to the limits fixed by statute and notification; in the absence of such extension, the Bombay Preventive Collector had no jurisdiction over imports through Ahmedabad.

---

---

Issues: (i) Whether a notice invoking the extended period of limitation under the Customs Act, 1962 was valid when issued by an Assistant Collector instead of the authority required by the law then in force and whether a later amendment could retrospectively cure that defect; (ii) Whether import of components and sub-assemblies of a VCR at different times amounted to an unlawful import scheme or conspiracy so as to sustain the demand and penalties; (iii) Whether the Collector of Customs (Preventive), Bombay had territorial jurisdiction to adjudicate imports made through Ahmedabad.

Issue (i): Whether a notice invoking the extended period of limitation under the Customs Act, 1962 was valid when issued by an Assistant Collector instead of the authority required by the law then in force and whether a later amendment could retrospectively cure that defect.

Analysis: The validity of the notice had to be tested with reference to the law prevailing on the date of its issue. A notice that was unauthorised when issued could not be validated merely because the law was later amended, unless the amendment expressly conferred retrospective competence. The distinction between the existence of a limitation period and the jurisdiction of the issuing authority was material, and the latter went to the root of the matter.

Conclusion: The notice was invalid for want of jurisdiction, and the demand based on it was barred by limitation.

Issue (ii): Whether import of components and sub-assemblies of a VCR at different times amounted to an unlawful import scheme or conspiracy so as to sustain the demand and penalties.

Analysis: The imports consisted of components and sub-assemblies, and there was no finding that import of such parts was prohibited. The policy permitting import of components contemplated their use for repair or manufacture, and the mere fact that different consignments were eventually assembled into a machine did not by itself establish illegality or conspiracy. On the facts, the case did not justify treating the imports as a prohibited import of complete VCRs.

Conclusion: The allegation of unlawful import scheme or conspiracy was not sustainable.

Issue (iii): Whether the Collector of Customs (Preventive), Bombay had territorial jurisdiction to adjudicate imports made through Ahmedabad.

Analysis: Territorial jurisdiction under the Customs Act, 1962 depended on the statutory allocation of authority and the relevant notifications. In the absence of a notification extending jurisdiction over Ahmedabad, the Bombay Preventive Collector could not adjudicate imports routed through Gujarat, and officers subordinate to him could not validly issue notice in respect of those imports.

Conclusion: The adjudication was without territorial jurisdiction and could not be sustained.

Final Conclusion: The appeal succeeded and the impugned order was set aside because the demand was invalid, the merits did not support the department's case, and the adjudicating authority lacked territorial jurisdiction.

Ratio Decidendi: A customs demand notice invoking extended limitation must be issued by a legally competent authority as on the date of issue, and a later amendment does not retrospectively cure absence of jurisdiction unless the statute clearly so provides; territorial adjudicatory power under the Customs Act is confined to the limits fixed by law and notification.

---