Relief for JSW Steel: CESTAT Rules Corrigendum Issued After 5 Years to Original SCN Amounts to Fresh Notice, Quashes Demand as Time-Barred [Read Order]
CESTAT quashes time-barred duty demand against JSW Steel, holding that the corrigendum issued after five years amounted to a fresh show cause notice
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a corrigendum issued five years after the original show cause notice, which materially altered its contents, amounted to a fresh notice. The tribunal held that it was time-barred under Section 28 of the Customs Act.
JSW Steel Ltd, the appellant, had exported consignments of hot rolled and cold rolled non-alloy steel coils in April and May 2008. Most of the consignments were cleared before the imposition of new export duties under Notification No. 66/2008-Cus dated 10 May 2008, but five shipping bills were cleared on the day the notification came into effect.
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The Commissioner of Customs, Goa, raised a duty demand of Rs. 16,54,073 plus interest on those five shipments through a show cause notice dated 3 October 2008. The original notice did not mention the legal provision under which the demand was being made. A corrigendum was issued nearly five years later, on 11 April 2013, which cited Section 28 of the Customs Act for the first time.
It also altered essential aspects of the original notice, including weights, amounts, and shipping bill details. The appellant’s counsel argued that such substantial changes could not be considered a mere correction and that the corrigendum amounted to a fresh show cause notice, which was issued well beyond the one-year limitation period allowed under Section 28.
The department’s counsel argued that the omission of the legal section in the original notice did not render it invalid and that the corrigendum simply clarified and corrected minor errors. They relied on decisions to support the view that as long as the demand was clear, the notice stood valid.
The tribunal comprising Dr. Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member) explained that the corrigendum had materially altered the contents of the original notice, including key figures and legal basis.
The tribunal pointed out that such alterations, made after a gap of five years, could not be treated as simple corrections and had the effect of issuing a fresh notice. The revised content formed the actual basis of adjudication, and the corrigendum came well after the permissible limitation period, so the tribunal ruled that the demand was time-barred.
The tribunal set aside the order-in-original dated 29 November 2013, quashed the duty demand of Rs. 16,54,073, and allowed the appeal. The matter was disposed of with consequential relief.
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