The Delhi High Court has held that notice issued after the expiry of the prescribed period under section 28(9) of the customs act is not valid
Gautam Spinners, Pdg Wool Traders, S M Trading Co, Eastman International Challenged various show cause notices issued under Section 28(4) of the Customs Act, 1962. The notices are challenged on the ground that since the period for completion of proceedings as prescribed in Section 28(9) of the Act has expired, the authorities would retain no jurisdiction to adjudicate upon the same.
A Show Cause Notice was issued against the petitioners in respect of five Bills of Entries. The petitioner disclosed that the Assistant Commissioner of Customs apprised them that the competent authority had accorded due approval to keep adjudication proceedings pertaining to the said notice in abeyance and till further orders in light of the provisions made in Section 28(9A)(c) of the Act.
The SCN against Gautam Spinners had been issued in purported exercise of powers conferred by Section 28(4) and which enables the Customs authority to initiate proceedings where duty has either not been levied, not paid, short levied, short paid or erroneously refunded on account of collusion, wilful misstatement or suppression of facts by the importer or the exporter as the case may be.
The competent authority of Customs would have been justified in placing the impugned SCN proceedings pending only in a situation where the original SCNs’ had been issued by an officer of the DRI.
In terms of sub-section (9) and since the notice had been issued with reference to Section 28(4), the proceedings were liable to be brought to a close within one year from the date of the notice and the same being computed from 05 August 2021.
A division bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma viewed that “the proceedings initiated against the present petitioners cannot be said to be covered under the directives of the Board noticed. Those SCNs’ would also not fall within the ambit of Section 28(9A)(c). Since admittedly, the maximum period as prescribed under Section 28(9) has expired, those proceedings would not survive in law.”
While allowing the appeal, the Court quashed and set aside the impugned SCNs.
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