2019 (2) TMI 1375 – CESTAT NEW DELHI – TMI – Extension of the date for issuing show cause notice after detention/seizure of the goods – appellant submits that in this case, the appellant were not issued the Show Cause Notice and given opportunity to be heard before extending the time limit for issuance of Show Cause Noptice under provisions of Customs Act – whether after the amendment of Section 110(2) of Customs Act by Finance Act, 2018 is there any need for issuance of the Show Cause Notice before the extension is permitted by another six months on the reasonable ground by the Commissioner/adjudicating authority? – Section 110 of the Customs Act, 1962.
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Held that:- Clause 90 of the Bill seeks, to amend Section 110 of the Customs Act so as to give power to extend the period for issuing Show Cause Notice in case of seized goods by a further period of six months to case in cases where no order for provisional release of goods has been passed.
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After amendment not only the Sh
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eing disposed of by this common order. The details of the adjudication order are as under : S.No. Bill of Entry Name of Importer Date of detention/seizure 1. 6045058 & 6046267 dated 19.4.2018 M/s Swees Gems & Jewelery 26.4.2018/8.8.2018 2. 6044641 & 6045969 dated 19.4.2018 M/s Aardhya Impex 26.4.2018/8.8.2018 2. In all these cases, the appellants have imported the consignment of rough diamond (precious stone) from Hong Kong and filed Bills of Entry for their clearance through ICD, Jaipur thereof. During the scrutiny of aforesaid Bills of Entry by DRI, it was found that the imported consignment of rough diamond were heavily overvalued and accordingly, those were seized for further investigation on 8.8.2018 under Section 110 of the Customs Act, 1962 (hereinafter referred to as Customs Act ) under the reasonable belief that the same was liable for confiscation under the provisions of Section 111 of Customs Act as the IEC holder were not found to be actual importer and also the
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to be heard before extending the time limit for issuance of Show Cause Noptice under provisions of Customs Act. 4.1 He referred and relied upon the decision of Hon ble Supreme Court in the case of I.J. Rao, Assistant Collector of Customs Vs. Bibhuti Bhushan Bagh – 1989 (42) ELT 338 (SC) wherein it is held that extension of six months period for issuance of Show Cause Notice cannot be done by the Commissioner without hearing the appellants. This decision also refers to the post decisional hearing by the Collector but only in such cases where service of notices evaded. This has not been the case with the appellants. Further even after the impugned order of extension the time limit for issue of Show Cause Notice was passed appellants have not been granted even post decisional hearing although the request for the same was made in the writing by them. 4.2 He also relied upon the decision of Harbans Lal Vs. Collector of Customs – 1993 (67) ELT 20, wherein it is held that by extending the tim
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hers – 1998 (36) ELT 91 (Bom.). 4.4 The ld. Advocate also submitted that the amendment to the provisions of Section 110(2) of Customs Act by Finance Act, 2018, will not alter the situation as for grant of personal hearing before the extension of Show Cause Notice. He, accordingly, prayed for setting aside the impugned order and allow release of seized goods for the violation of the provisions of Section 110(2) of Customs Act. 5. Ld. AR, on the other hand, supported the impugned order and stated that the provisions of Section 110(2) of Customs Act, after being amended by Finance Act, 2018, wherein ON SUFFICIENT CAUSE BEING SHOWN has been replaced by FOR REASONS TO BE RECORDED IN WRITING, for extension of time period for a further period not extending six months and inform the person concerned from whom such goods were seized before the expiry of period so specified. He, therefore, argued that in the requirement for issuance of Show Cause Notice before extending the time period by anothe
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d by another six months on the reasonable ground by the Commissioner/adjudicating authority. To resolve the controversy, it will be appropriate to refer the Section 110(2) before the amendment and also after the amendment vide Finance Act, 2018. The same is reproduced as under : Section 110(2) before Section 110(2) after Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the [Commissioner of Customs] for a period not exceeding six months Where any goods are seized under sub-section (1) and no (2) notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized.
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the period for issuing Show Cause Notice in case of seized goods by a further period of six months to case in cases where no order for provisional release of goods has been passed. We find that similar issue has been decided by the coordinate bench of this Tribunal vide Final Order No. 75047-75048/2018 dated 17.1.2019 in the case of S.R.K. Metal & Industries & Pink Commercial, wherein it is held as under: Our attention was also drawn towards the decision of Sardar Kulwant Singh vs. Collector of Central Excise and Customs, wherein it is held that an order extending period of issue of Show Cause Notice under Section 110(2) and 124 of the Customs Act, 1962, without giving an opportunity of being heard to the affected party is illegal. Further, the requirement of issue of Show Cause Notice issued under Section 124 of the Customs Act in such a case was held to be a must relying upon the various judgments referred as above. Relying on these judgments, we find that the seized goods ar
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erefore, the person from whom the goods have been seized, is entitled to notice of the proposal before Adjudicating Authority for the extension of original period of the six months under Section 110(2) of the Customs Act subject to the restriction that he is not entitled to the information about the investigation which is in possession of the Investigating Agency as there can be no right in any person to be informed whose goods during the investigation material collected against him and there is no need for maintaining the investigation proceedings. This view has been affirmed in the I G Rao case referred (supra). The provisions of Section 110(2) before and after the amendment is as identical but for on sufficient cause being shown has been replaced with reasons to be recorded in writing extends such period , for a period not exceeding six months and inform the person from whom such goods were seized before expiry of the said period. Careful analysis of the provision makes it clear tha
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. This is also cleared from statements of objects in the Finance Act as discussed above. 13. In view of above, we are of the opinion that the impugned order is in violation in this provisions of Section 110 of the Customs Act has held in the various decisions discussed above. We have also seen the note sheet order of the Ld. Commissioner in this case. It is seen from the order that the Commissioner while extending the time period has only gone by the letter of DRI and not put up to him by his office without examining the merits of the such extension and recording his own finding. His finding is only two worded finding which is GC issued dated 26/06/2018 Sd- M Chandra This proves that there is no independent application of mind by the Commissioner (Port) for the extension of Show Cause Notice even by accepting his assertion that the only requirement is that the Principal Commissioner/ Commissioner of Customs made for the reasons to be recorded in writing, extends such period to further
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