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2024 (11) TMI 418
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....ng the respondent from adjudicating the show cause notice dated 28.09.2022 being barred by limitation in terms of Section 28(9) of the Customs Act, 1962 (in short 'the Act') and proceedings are deemed to be concluded in view of second proviso of Section 28(9) of the Act. 4. The learned counsel for the petitioner submitted that the present show cause notice 28.09.2022 was issued by the respondent and the same is barred by limitation. However, he fairly submitted that the petitioner has filed a reply notice and the matter is at the stage of cross examination and is adjourned from March 2023 till date without any progress. He further submitted that the aspect of limitation was also raised before the authorities concerned, but they have decided to proceed with the adjudication, despite having no jurisdiction. The respondent had initiated the proceedings in respect of the impugned show cause notice only in June 2024, after the cross examination was allowed by the Tribunal in May 2023 and prior thereto, there was no communication by the respondent. There is no reason whatsoever which prevented the proper officer from determining the amount of duty or interest within the ....
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....d 28.09.2022 bearing Ref.F.No.S.Misc.131/2022-Gr-4 had statutorily lapsed. 5. On the other hand, it is the contention of the respondent Customs Department that under Proviso to Section 28(9) of the Customs Act, 1962, the time period stands extended up to 27.09.2024 in view of Order/Communication dated 07.05.2024 of the Chief Commissioner of Customs, Chennai Customs Zone, Custom House, Chennai, extending the period of limitation for passing Order in respect of Show Cause Notice F.No.S.Misc.131/2022-Gr-4 dated 28.09.2022. 6. As per Section 28(9) of the Customs Act, 1962, the proper officer has to determine the amount of duty or interest under Sub-Section (8) to Section 28 of the Customs Act, 1962, (a) within six months from the date of notice in respect of cases falling under clause (a) of sub-section (1); (b) within one year from the date of notice in respect of cases falling under sub-section (4). 7. The Show Cause Notice F.No.S.Misc.131/2022-Gr-4 dated 28.09.2022 relates to the period under Section 28(4) of the Customs Act, 1962. As per the first proviso to Section 28(9) of the Customs Act, 1962 where the proper officer fails to so determine the amount o....
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....ime specified in sub-section (9) shall apply not from the date of notice, but from the date when such reason ceases to exist under the following circumstances:- (a) an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal or the High Court or the Supreme Court; or (b) an interim order of stay has been issued by the Appellate Tribunal or the High Court or the Supreme Court; or (c) the Board has, in a similar matter, issued specific direction or order to keep such matter pending; or (d) the Settlement Commission has admitted an application made by the person concerned. 11. Sub-Section (9-A) to Section 28 of the Customs Act, 1962 reads as under:- "(9-A) Notwithstanding anything contained in sub-section (9), where the proper officer is unable to determine the amount of duty or interest under sub-section (8) for the reason that- (a) an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal or the High Court or the Supreme Court. (b)An interim order of stay has been issued by the Appellate Tribunal or the High Court or ....
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....d. For immediate reference, the relevant portion of the daily order dated 30.09.2024 in W.A.No.2542 of 2023 is extracted hereunder: "2. For continuation of arguments and to produce the necessary files dealing with the steps taken towards initiating disciplinary action against the erring officials who kept the file without filing an appeal from 16.06.2023 till 29.04.2024 without any plausible reason and to file a supporting affidavit to that effect, learned Additional Solicitor General seeks time till 16.10.2024." 2. I submit that the above direction was intimated to the Respondent vide letter dated 30.09.2024 by the Standing Counsel for the Department. In this regard, pursuant to the file noting of the Chief Commissioner dated 19.06.2024 which is also extracted hereunder, disciplinary action against the erring officers were initiated: "This is outright lapse and dereliction of duty of officers of Preventive Commissionerate & Import Commissionerate which is detrimental to the interests of Revenue. For this inaction of officers adversely affecting Revenue, appropriate Departmental proceedings should be instituted. The Pr. Commissioner Preventive & Commissio....
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.... 198. vii. State of Punjab and others Vs. Shreyans Industries Limited and others, (2016) 4 SCC 769. viii. Maneklal Chunilal & Sons Limited Vs. The Commissioner of Income Tax (Central) Bombay, 1953 SCC OnLine Bom 38. ix. Flexoplast Abrasives (India) Limited Vs. Union of India and others, 1980 (6) E.L.T. 513 (Bom.). x. Wipro Products Limited Vs. Union of India, 1981 (8) E.L.T. 531 (Bom.). xi. Karnavati Club Limited. Vs. Union of India, 2010 (20) S.T.R. 169 (Guj.). xii. C.Solomon Selvaraj Vs. Principal Commissioner of Customs, Chennai in W.P.No.1738 of 2021 dated 13.10.2023. 19. From the case of 'C.Solomon Selvaraj (cited supra) of this Court, the learned counsel for the appellant has referred to Paragraphs 53 to 59. They are reproduced below:- "53.On the other hand, in respect of cases filing under Section 28(9)(4) of the Customs Act, 1962, the proper officer has to determine the amount of duty or interest under Sub- Section (8)of the Customs Act, 1962, within a period of one year from the date of the notice. 54.Ordinarily, the said Show Cause Notice bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017....
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....d on the following decision of this Court:- i. C.Solomon Selvaraj Vs. Principal Commissioner of Customs, Chennai in W.P.No.1738 of 2021 dated 13.10.2023. 22. The learned Additional Solicitor General of India would submit that question for extending the limitation under the proviso to Section 28(9) of the Customs Act, 1962 will arise only after the initial period of six months or one year as the case may be had expired. It is therefore submitted that since the Chief Commissioner of Customs, Chennai Customs Zone, Custom House, Chennai has exercised the power on 07.05.2024, the respondent Customs Department should be allowed to proceed with the Show Cause Notice dated 28.09.2022 bearing Ref.F.No.S.Misc.131/2022-Gr-4. 23. We had heard at length over a period of time. We have considered the submissions of the learned counsel for the appellant and the learned Additional Solicitor General of India for the respondent. 24. The point for consideration is whether the proceedings initiated in the Show Cause Notice dated 28.09.2022 can be continued in the light of the extension granted by the Chief Commissioner of Customs, Chennai Customs Zone, Custom House, Chennai on 07.05.2....
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....arly, the order that was passed by the Deputy Commissioner of Customs (Adjudication), Chennai-III on 19.04.2023 bearing FS/GEN/ADJ/COMM/370/2022-Adjn, DIN No.20230473MY000092149 was itself without jurisdiction even though the request dated 10.04.2023 of the appellant was addressed to the Principle Commissioner of Customs, Preventive Commissionerate, Chennai-III. 32. That apart, even if a wrong Order was passed by the the Deputy Commissioner of Customs (Adjudication), Chennai -III, the appellate remedy if any for the appellant, would have been only before the Appellate Commissioner under Section 128 of the Customs Act, 1962 and not before CESTAT under Section 129-A of the Customs Act, 1962. 33. As per Section 128 of the Customs Act, 1962, any person aggrieved by any decision or Order passed under the Act by an Officer of customs who is lower in rank than a Principal Commissioner of Customs or Commissioner of Customs, may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or Order. Thus, the Order dated 19.04.2023 of the Deputy Commissioner of Customs (Adjudication), Chennai-III bearing FS/GEN/ADJ/COMM/370/2022-Adjn....
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....the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or iii. the amount of fine or penalty determined by such order. 37. For the sake of clarity, Section 128 and Section 129-A (1) of the Customs Act, 1962 are reproduced below:- Section 128 Section 129-A (1) 128. Appeals to Commissioner (Appeals).- (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a Principal Commissioner of Customs or Commissioner of Customs may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order: Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (1-A) The Commissioner (Appeals) may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to....
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....e, the difference in duty involved or the duty involved; or (iii) the amount of fine or penalty determined by such order. 38. If the said Order dated 19.04.2023 was passed by Principal Commissioner of Customs or the Commissioner of Customs, Chennai-I Commissionerate the so called appeal filed by the appellant in Appeal Diary No.401592023 which was allowed on 26.05.2023 vide Interim Order No.40048 of 2023 could have been entertained by CESTAT under Section 129-A of the Customs Act, 1962. 39. Thus, Interim Order No.40048 of 2023 dated 26.05.2023 that was passed by CESTAT in Appeal Diary No.401592023 itself was a nullity and without jurisdiction. The Application in Appeal Diary No.401592023 is not permissible even under Rule 28C of CESTAT (Procedure) Rules, 1982. As such, CESTAT ought not to have been entertained such an appeal. 40. An appeal, if any, ought to have been filed against the Interim Order No.40048 of 2023 dated 26.05.2023 under Section 130 of the Customs Act, 1962 within a period of 180 days from the date of its communication. Thus, the appeal if any ought to have been filed by 30.11.2023. Ideally, a Writ Petition ought to have been filed as Order dated 26.06.....
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....23 before the Hon'ble High Court had expired; that the Adjudicating Authority may proceed with the adjudication proceedings allowing cross- examination of the witnesses as directed by Hon'ble CESTAT. 6. It is submitted that the Show Cause Notice in the impugned case has been issued under Section 28(4) of the Customs Act, 1962 on 28.09.2022 and the time limit for completing the adjudication as per Section 28(9)(b) of the Act ibid, had expired on 28.09.2023. 7. In view of the foregoing, it is requested that the Chief Commissionerate of Customs may kindly extend the time limit for Adjudication in the instant case by 1 year as per second proviso to the Section 28(9) of the Customs Act, 1962. The extension will facilitate cross-examination requeted by the noticee and comprehensive examination of the case records/submissions of the importer to arrive at a judicious decision within the canons of natural justice." 42. Thus, a reading of the above communication/request dated 03.05.2024 of the Chief Commissioner of Customs (In-Situ), Chennai-III (Preventive) Commissionerate, Office of the Principal Commissioner of Customs (Preventive), Chennai addressed to the Co....
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.... It is therefore clear that the question of granting extensions under the first proviso to Section 28(9) of the Customs Act, 1962 will arise only after the limitation for passing Order determining duty or interest, as the case may be, within the time stipulated under Section 28(9) of the Customs Act, 1962 had expired. 49. Therefore, only after the period of six months or one year, as the case may be, the senior officer could extend the period by another six months or one year specified in Clause (a) and Clause (b) under the first proviso to Section 28(9) of the Customs Act, 1962. The second proviso to Section 28(9) of the Customs Act, 1962, further contemplates abatement of the proceedings if after the extension period under the first proviso to Section 28(9) of the Customs Act, 1962, no Orders are passed. 50. The clarification of the Commissioner of Customs, NS-IV, Mumbai Customs Zone-II, Nhava Sheva, Raigad-400 707 in Standing Order No.12/2018 dated 25.04.2018 was issued in the wake of amendment to Section 28(9) of the Customs Act, 1962 vide Finance Act, 2018 (13 of 2018). The clarification issued therein itself is a non-application of mind as the second proviso to Section ....
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....TAT Order dated 26.05.2023 had expired. 56. Therefore, a decision appears to have been rightly taken on 29.04.2024 for getting extension. It is also strange to note that no steps was taken by the Customs Department to file appeal with an application for condonation of delay. That apart, since the Order of the Deputy Commissioner of Customs (Adjudication), Chennai-III dated 19.04.2023 bearing reference FS/GEN/ADJ/COMM/370/2022-Adjn, DIN No.20230473MY000092149 was without jurisdiction, the correct remedy that was available was to file a Writ Petition under Article 226 of the Constitution of India. 57. There are indications that the entire statutory safeguards under the Acts have been attempted to be prevaricated by the Officials of the Customs Department to allow the appellant and the co-noticees go scot free in the show cause proceedings. There appears to be large-scale complicity on the part of the officials of the Customs Department from the senior to junior ranks to allow the appellant and his co-noticee to get away. Mere initiation of the disciplinary proceedings against two officials is not sufficient. The seniors, who are involved also should be proceeded. The Deputy Com....