No Customs Duty Demandable by invoking extended period of limitation unless there is evidence of collusion or willful suppression of facts: CESTAT [Read Order]

Customs duty is not demandable by invoking an extended period of limitation. 

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Customs Duty cannot be demanded by invoking an extended period of limitation unless there was evidence of collusion or willful suppression of facts. 

Javeria Impex India Pvt. Ltd, the appellant assessee was an importer and imported electric motors from China and filed two Bills of Entry the department alleged that the declared transactional value of goods was comparatively low. 

The assessee appealed against the order passed by the adjudicating authority for the confiscation of goods seized under section 110 of the Customs Act,1962 but they were later released provisionally on execution of bonds and bank guarantees. 

Vaibhav Singh, the counsel for the assessee contended that the goods were cleared by the officers after examination and in respect of one of the Bills of Entry, the declared assessable value was also enhanced by 25% by the officer re-assessing the Bill of Entry. Therefore, there was no case to allege undervaluation much later and demanding duty under section 28 of the Customs Act,1962 invoking an extended period of limitation alleging suppression. 

Rakesh Kumar, the counsel for the department contended that the assessee had agreed to pay the differential duty in respect of these five Bills of Entry in its statement and it cannot be allowed to renege at this stage. Just like the demand for the two current Bills of Entry, the demand for differential duty for these five Bills of Entry also needs to be upheld. 

The Bench observed that once the goods are cleared for home consumption after examination and assessment unless there is evidence to support, a demand under section 28 of the Customs Act invoking an extended period of limitation cannot be raised unless there is evidence of collusion or willful misstatement or suppression of facts are proven. 

The two-member bench comprising Rachna Gupta (Judicial) and Subba Rao (Technical) quashed the differential duty demand against the assessee. 

To Read the full text of the Order CLICK HERE

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