Delhi HC Condones 1610-Day Delay in Customs Appeal Due to ED Custody, Health Issues, and COVID-19 Disruptions [Read Order]

The Delhi High Court in a recent ruling, condoned a 1610-day delay in a customs appeal due to Enforcement Directorate (ED) custody, health issues, and COVID-19 disruptions.

Durga Apparels Pvt Ltd., petitioner-assessee, was investigated for allegedly exporting over-valued goods to claim fraudulent duty drawbacks. A Show Cause Notice was issued on 14th August, 2013, and a reply was filed on 27th June, 2016. The Order-in-Original dated 26th September, 2016, was upheld by the Commissioner of Customs (Appeals) on 28th May, 2019. It was held that 365 shipping bills were liable for confiscation under Section 113 of the Customs Act, and the matter was partly remanded for re-determining penalties under Section 114(iii).

Meanwhile, the Enforcement Directorate and DRI also began separate investigations. The assessee’s Director, Mr. Sajjan Kumar, was arrested on 25th September, 2021, and reportedly faced health issues thereafter.

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The assessee filed an appeal before Customs,Excise and Service Tax Appellate Tribunal(CESTAT) on 29th January, 2024, challenging the 2019 order, but there was a delay of over 1610 days. CESTAT dismissed the appeal on 10th February, 2025, citing failure to explain the delay.

The assessee claimed the delay was due to the Director’s health issues and the COVID-19 pandemic. It was also stated that the Director remained in custody during this period. The department argued that no medical records were filed for the period before 2020 and pointed out that the petitioner had already received over ₹13 crores in duty drawback from the alleged transactions.

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The division bench of Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta observed that under Section 129A of the Customs Act, 1962, the appeal had to be filed within three months. However, the law also allowed for condonation of delay if sufficient cause was shown.

After considering the submissions, the Court found that three key factors justified the delay. First, the investigations by the Directorate of Revenue Intelligence and the Enforcement Directorate, which began in 2019, had led to the arrest of the petitioner’s Director on 25th September, 2021. Second, the COVID-19 pandemic from 2020 to 2022 had disrupted normal functioning, and this period had already been taken into account by the Supreme Court for extension of limitation. Third, the petitioner had placed some medical records on record to support the claim regarding the Director’s health condition.

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Based on these factors, the High court held that the petitioner had shown sufficient cause for the delay in filing the appeal. However, the delay was condoned subject to strict conditions.

The bench directed the petitioner to deposit ₹5 lakhs as costs with the department and warned that no unnecessary adjournments should be sought before CESTAT.

Accordingly, the Court set aside the impugned order and restored the appeal before CESTAT for adjudication on merits. Therefore, the appeal was disposed of.

To Read the full text of the Order CLICK HERE

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