Whether the appellate Tribunal was right in holding that the demand notice dated 1-12-2000 is time barred when the said notice is in time in pursuance of provision of Section 28 & 153 of the Custom Act 1962 and Section 8,9, 27 of the General clause Ac

PJ/Case Law/2013-14/1976

Case:- COMMISSIONER OF CUSTOMS (EXPORT), CHENNAI-I VS LALCHAND BHIMRAJ

Citation: 2013 (297) E.L.T. 358 (Mad.)

Brief facts:- The Importer herein filed three bill of entry dated 26-5-2000, 4-5-2000 and 28-8-2000 classifying the good imported viz Ascorbic Acid BP 98 USP 23 vitamin C as falling under Custom Tariff heading 2936.37 which attracted 35% of Basic Custom Duty plus 10% Surcharge plus 16% countervailing duty. The respondent has sought clearance under Custom Notification No. 34/97. The Deputy Commissioner of Customs passed an adjudication order after issuing show cause notices, raising demands for payment of anti-dumping duty amounting to Rs. 1,68,531/- on the assessee stating that anti-dumping duty of Rs. 10,53,320/- paid by the assessee was not taken into account for the purpose of levying countervailing duty. The assessee contended that the demand of duty being served beyond the period of six months from the dates of payment of duties of Customs on the imported goods, the proceedings taken for the alleged balance of anti-dumping was without jurisdiction. The assessee contended that the limitation period had already lapsed to assume further jurisdiction to demand duty. Apart from the assessee, notices were also served within the time limit on the Customs Clearing Agent. However, considering the fact that the service on the Clearing Agent was not a valid service as held in 1999 (106)E.L.T.9 - Collector of Customs, Cochin v. Trivandrum Rubber Works Limited, question arose as to the validity of service of notice on the importer assessee that the demand notices to the assessee was beyond the limitation period of six months as given under Section 28 Customs Act read with Section 153 of the Customs Act. The Adjudicating Authority referred to the decision of the Kerala High Court reported in 2000 (125)E.L.T.50 (Ker.) - Ambali Karthikeyan v. Collector of Customs and Central Excise and held that to find out whether the notice has been served within the limitation period, the date of issue of demand notice had to be taken as a limitation point. Thus, quite apart from the fact that the notice was served on the clearing agent well in time, the notice on the importer served on the assessee was held as well within six months as contemplated under Section 28 of the Customs Act. Aggrieved by this, the unsuccessful importer canvassed the case before the first Appellate Authority. The first Appellate Authority rejected the case of the importer. Aggrieved by the same, the importer went on further appeal before the Customs, Excise and Service Tax Appellate Tribunal. A reading of the Tribunal shows that the issue in appeals before the Tribunal related to three Bills of Entry, which are as follows :-

S. No.	Appeal No.	B.E. No.	B.E. Dated	Date of payment of duty	Date of despatch of demand notice	Date of expiry of period of limitation
1.	C/82/2002	14797	26-5-2000	1-6-2000	1-12-2000	1-12-2000
2.	C/83/2002	12032	4-5-2000	9-5-2000	7-11-2000	9-11-2000
3.	C/84/2002	25633	28-8-2000	4-9-2000	12-2-2001	4-3-2001

In considering the claim of the importer as well as the Revenue, the Tribunal rejected the reliance placed by the Revenue on Section 27 of the General Clauses Act and held that the same was of no relevance. Considering the fact that Section 28(1) of the Customs Act prescribed the period of limitation as six months for the purpose of initiation of any action under Section 28 of the Customs Act, the period of limitation of six months started from the date of payment of duty by the importer and going by Section 153 of the Customs Act, which provides mode of service, the Tribunal thus came to the conclusion that the proceedings were totally time barred. Aggrieved by this, the Revenue is on appeal before Madras High Court.

Appellant’s contentions:-   The Learned Senior Central Government Standing Counsel appearing for the Revenue however fairly submitted that order of the Tribunal was challenged only as regards the Bill of Entry No. 14797, dated 26-5-2000, when the date of payment of duty was 1-6-2000 & notice was served on the assessee only on 2-12-2000. Nevertheless, he sought to sustain the notice as one within the period of limitation based on the understanding of Section 153 of the Customs Act, which principally dealt with mode of service of order, decision etc. The said provision reads as follows :-
Service of order, decision, etc. - Any order or decision passed or any summons or notice issued under this Act, shall be served -
(a)    by tendering the order, decision, summons or notice or sending it by registered post to the person for whom it is intended or to his agent; or
(b)    if the order, decision, summons or notice cannot be served in the manner provided in clause (a), by affixing it on the notice board of the customs house.

Revenue sought to support its contention on the strength of the decision of the Kerala High Court cited supra, which persuaded the adjudicating authority to hold that the demand was well within the time limit
The six months period of limitation has to be calculated from the relevant date. The ‘relevant date’ is defined in Section 28(3) of the Customs Act as the date on which the proper officer makes an order for the clearance of the goods or in any other case the date of payment of duty or interest. Given the fact that the payment of duty on the above bill of entry was on 1-6-2000 and going by Section 28 of the Customs Act, the six months time for the purpose of invoking jurisdiction under Section 28 has to be counted from the date of payment of duty i.e. on 1-6-2000. On the facts admitted, with the notice served on 2-12-2000 after the expiry of time limit on 1-12-2000, we have no hesitation in holding that the Tribunal has rightly come to the conclusion that the proceedings initiated by the adjudicating authority was time barred. Hence, cannot be sustained.

Reasoning of judgment:- The Hon’ble High Court held that the reliance placed on the decision of the Kerala High Court is concerned, they do not find that Revenue could draw any assistance from the said decision by making reliance on Section 28 of the Customs Act. It may be relevant to point out that similar contention taken in respect of other two bills of entry are not under challenge before this Court. When the Revenue had accepted the two other bills of entry, on the same line of arguments, Thus the logic in challenging the order of the Tribunal in respect of one bill of entry, which was the subject matter in one of the appeals before the Tribunal was not understandable.

Decision:- Appeal Dismissed

Comment:- In this case Tribunal contended that the limitation period had already lapsed to assume further jurisdiction to demand duty. On this, the revenue is in appeal before Madras high court wherein it was held that no reliance could be placed on section 28 of the custom act and the High court fail to understand the logic in challenging the order of the Tribunal in respect of one bill of entry, which was the subject matter in one of the appeals before the Tribunal when the revenue has accepted the other two bill of entry on the same line of argument.

Comments

PJ/Case Law/2013-14/1976

Post a Comment

Query