Period of five years u/s 28 of Customs Act is prescribed Period of Limitation: Delhi HC upheld order of CESTAT [Read Order]

Upholding the Order of the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’) ruled that the period of five years under Section 28 of the Customs Act, 1962 is prescribed period of limitation.

The appellant has filed the present appeal, impugning an order passed by the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’) setting aside the demand of custom duty raised under Section 28B of the Customs Act 1962 (‘Customs Act’), on the ground that the proceedings initiated were barred by limitation.

The allegation against the respondent, Anurag Trading Company is that the respondent had availed the benefit of the notification no. 39/96-Customs dated 23.07.1996 and imported the goods by submitting forged custom duty exemption certificates purportedly issued by the General Manager, OEF (‘the purchaser’).

The CESTAT had found that the demand raised was beyond the period of limitation. It has observed that although no time limit had been prescribed under Sections 28B of the Customs Act; the time limit as prescribed under Section 28 of the Customs Act could be considered for the said purpose

The controversy is limited to the 39 Bills of Entries. In respect of the goods imported under the said Bills of Entries, the customs authority had raised a demand of Rupees two crores. There is also a controversy whether the respondent had recovered any duty from OEF, Kanpur for the supply of equipment imported under these Bills of Entries.

Harpreet Singh, Counsel for the appellantsubmitted that there is no period of limitation prescribed under Section 28B and, therefore, the CESTAT had erred in setting aside the demand on the ground that it was barred by limitation.

The Coram comprising Justices Vibhu Bakhru and Amit Mahajan held that “It is relevant to note that the period of limitation as provided under Section 28 of the Customs Act is a period of five years from the relevant date. It is, thus, apparent that theCESTAT had proceeded on the basis that a reasonable period for taking an action under Section 28B of the Customs Act would also be a period of five years.”

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