M/S. Bihar Foundry & Castings Ltd vs Union Of India Through The Secretary
2024 Latest Caselaw 2590 Jhar

Jharkhand High Court

M/S. Bihar Foundry & Castings Ltd vs Union Of India Through The Secretary on 4 March, 2024

Author: Rongon Mukhopadhyay

Bench: Rongon Mukhopadhyay, Deepak Roshan

                               1




   IN THE HIGH COURT OF JHARKHAND AT RANCHI
                  W.P. (T) No. 5161 of 2022
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M/s. Bihar Foundry & Castings Ltd., through its Director Sri Gaurav Budhia ..... Petitioner Versus

1. Union of India through the Secretary, Ministry of Finance, Department of Revenue having his office at Central Secretariat, North Block, P.O & P.S. Vijay Chowk, New Delhi.

2. Central Board of Indirect Taxes and Customs, Government of India, Ministry of Finance, Department of Revenue North Block, P.O. & P.S. Vijay Chowk, New Delhi.

3. The Commissioner (Appeals), Central Goods and Services Tax, Central Excise & Customs, Central Revenue Building, Rajswa Vihar, Bhubaneswar, Odisha.

4. The Joint Commissioner, Commissionerate of Customs (Preventive), Central Revenue Building (GST Bhawan), Rajaswa Vihar, Bhubaneswar, Odisha. ...Respondents With

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M/s. Bihar Foundry & Castings Ltd., through its Director Sri Gaurav Budhia ..... Petitioner Versus

1. Union of India through the Secretary, Ministry of Finance, Department of Revenue having his office at Central Secretariat, North Block, P.O & P.S. North Block, New Delhi.

2. Central Board of Indirect Taxes and Customs, Government of India, Ministry of Finance, Department of Revenue North Block, P.O. & P.S. North Block, New Delhi.

3. The Commissioner (Appeals), Central Goods and Services Tax, Central Excise & Customs, Central Revenue Building, Rajswa Vihar, Bhubaneswar, Odisha.

4. The Assistant Commissioner, Customs Division, Dhamra, P.O. & P.S. Dosinga, Bhadrak, Odisha. ...Respondents

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CORAM: HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY HON'BLE MR. JUSTICE DEEPAK ROSHAN

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   For the Petitioner   : Mr. K.Kurmy, Advocate
                          Mr. N.K.Pasari, Advocate
   For the Res.-CGST    : Mr. Amit Kumar, Advocate
   For the Res.-UOI     : Mr. Anil Kumar, ASGI
                              ----





11/04.03.2024
Per Deepak Roshan J.

Heard learned counsel for the parties. Since both these writ

applications are inter connected and the issue involved is

common; as such both are heard together and disposed of by this

common judgment.

2. In writ application being W.P.(T) No. 5161 of 2022 the

petitioner has made following prayers;

"A. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Appeal dated 10-08-2022 bearing No.113-114/CUS/CCP/2022 which is at Annexure -"1" of this writ petition passed by the Respondent No.3, in exercise of powers conferred under Section 128 read with Section 128A of the Customs Act, 1962 and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962;

B. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Original dated 19-11-2018 bearing No. CC(P)/BBSR/CUS/No-16/Joint Commissioner/2018 passed by the Respondent No.4 which is at Annexure-"2" of this Petition and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and also that it is barred by limitation under Section 28(9)(a) ibid;

C. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Original dated 19-11-2018 bearing No. CC(P)/BBSR/CUS/No-17/Joint Commissioner/2018 passed by the Respondent No.4 which is at Annexure-"3" of this Petition and holding/declaring that the said impugned Order is bad in law as is passed ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and also that it is barred by limitation under Section 28(9)(a) ibid, D. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Show Cause Notice dated 20-04-2018 bearing C. No. VIII (10)11/SCN/BSIL/CUS(P)/BBSR/2018/8187A issued by the Respondent No.4 in respect of the Bill of Entry No.260/HC/2011- 12 Dated 20-03-2012, which is at Annexure-"4" of this Petition and holding/declaring that the said impugned Show Cause Notice is bad in law as is issued ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and that it is barred by reasonable period of limitation;

E. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Show Cause Notice dated 20-04-2018 bearing C. No. VIII(10)11/SCN/BSIL/CUS(P)/BBSR/2018/8189A issued by the Respondent No.4 in respect of the Bill of Entry No.261/HC/2011- 12 Dated 20-03-2012, which is at Annexure-"5" of

this Petition and holding/declaring that the said impugned Show Cause Notice is bad in law as is issued ignoring the mandatory provisions of Section 28 of the Customs Act, 1962 and is barred by reasonable period of limitation."

3. In writ application being W.P.(T) No. 4340 of 2022 the

petitioner has made following prayers;

"A. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Order-in-Appeal dated 01.08.2022 bearing No. 107- 110/CUS/CCP/2022 which is at Annexure-1 of this writ petition passed by the Respondent No.1, in exercise of powers conferred under Section 128 read with Section 128A of the Customs Act, 1962 and declaring that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction; B. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 26.06.2021 bearing No. C. No. VIII(06)95/CUS/DMR/2012/Pt./04/1087 passed by the Respondent No.4 finally assessing the Bill of Entry No.158/HC/2012-13 Dated 17.07.2012, which is at Annexure-"2" of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction; C. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 20/21.09.2021 bearing Order-in-Original No.AC/DMR/FA/IMP/02/2021 passed by the Respondent No.4 finally assessing the Bill of Entry No.341/HC/2012-13 Dated 26.11.2012, which is at Annexure-"3" of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction;

D. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 03-04-2018 bearing No. C. No. VIII(6)40/CUS/DMR/2012/447 issued by the Respondent No.3 finally assessing the Bill of Entry No.260/HC/2011- 12 Dated 20.03.2012, which is at Annexure-"4" of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction; E. For issuance of writ(s), order(s) and/or direction(s), quashing and setting aside the impugned Final Assessment Order dated 03.04.2018 bearing No. C. No. VIII(6)40/CUS/DMR/2012/448 issued by the Respondent No.3 finally assessing the Bill of Entry No.261/HC/2011- 12 Dated 20.03.2012, which is at Annexure-"5" of this Petition and holding that the finalization of provisional assessment in the instant case is barred by limitation and without jurisdiction"

4. The brief fact of the case is that the Petitioner is a

Company having its registered office and factories in the State of

Jharkhand. The Petitioner imported Steam Coal within the

meaning of Section 2(23) of the Customs Act, 1962 from outside

the territory of India for use in its factory in the State of

Jharkhand. The Petitioner is the importer of the Steam Coal

within the meaning of Section 2(26) of the Act.

5. In W.P.(T) No. 5161 of 2022, the Petitioner is challenging

the legality and validity of the common Order-in-Appeal dated 10-

08-2022. (Annexure "1") passed by the Commissioner (Appeal),

GST, Central Excise & Customs, Bhubaneswar, the Respondent

No.3 by which he set aside the impugned Order-in-Original dated

19-11-2018 (Annexure-"2") and the impugned Order-in-Original

dated 19-11- 2018 (Annexure-"3") and remanded the matter back

for denovo adjudication ignoring that the impugned Orders dated

19-11-2018 are barred by limitation of Six months under Section

28 (9) (a) of the Customs Act, 1962 and also entire proceedings is

carried out without Pre-Show Cause Notice consultation provided

under Section 28 (1) (a) of the Act which provisions are mandatory

and imperative in character and goes to the root of the matter.

The Petitioner in this writ petition is further challenging the

legality and validity of impugned Order-in-Original dated 19-11-

2018 (Annexure-"2") & Order-in-Original dated 19-11-2018

(Annexure - 3") passed by the Respondent No.4 under Section

28(8) of the Customs Act, 1962 demanding differential Basic

Custom duty of Rs.24,69,401/- @ 5% along with interest under

Section 28AA of the Act and imposition of penalty of

Rs.24,69,401/- under Section 112(a) and also imposition of

Redemption Fine of Rs.23,27,648/- in lieu of confiscation under

Section 125. The demand in the said order is confirmed under

Section 28(1) of the Customs Act, 1962.

The Petitioner in the instant writ petition has further

challenged the legality of impugned Show Cause Notice dated 20-

04-2018 (Annexure"4") & Show Cause Notice dated 20-04-2018

(Annexure-"5") issued by the Respondent No.4 under Section 28 of

the Customs Act, 1962 in respect of the Bill of Entry

No.260/HC/2011-12 Dated 20-03-2012 & Bill of Entry

No.261/HC/2011-12 Dated 20-03-2012 proposing in each case

differential Basic Customs duty of Rs.24,69,401/-@ 5% along with

interest under Section 28AA and penalty under Section 112(a) and

also confiscation of 3650 MT of Steam Coal of the value of

Rs.2,32,76,477/- under Section 111(d), Section 111(m) and

Section 112(a) of the said Act. Both the Show Cause Notices are

issued under Section 28(1) as no case of collusion, wilful mis-

statement or suppression of facts is alleged and no penalty for

such offences under Section 114A of the Customs Act, 1962 is

proposed.

6. Mr. Kartik Kurmi assisted by Mr. N. K. Pasari and Ms.Sidhi

Jalan, learned counsels for the petitioner submits that the Show

Cause Notice is issued under Section 28(1) as no case of collusion,

wilful mis-statement or suppression of facts is alleged and no

penalty for such offences under Section 114A of the Customs Act,

1962 is proposed or imposed.

In the year 2012, the Petitioner entered into High Seal Sale

vide Agreement dated 02-03-2012 with M/s QVC Exports Private

Ltd., (Bill of Entry No.260/HC/2011-12] and Agreement dated 02-

03-2012 with M/s QVC Exports Private Ltd., (Bill of Entry

No.261/HC/2011-12] for import of Steam Coal of South African

Origin for use in its factory in the State of Jharkhand for

manufacture of Sponge Iron and generation of electricity for use in

the production of finished goods. The said Steam Coal was

imported by the Petitioner as an importer within the meaning of

Section 2(26) of the Customs Act, 1962 through Dhamra Port in

the State of Odisha against said 2 nos. of Bill of Entries.

Upon filing of aforesaid Bill of Entries, the Superintendent

Customs, Dhamra Port, in the State of Odisha provisionally

assessed the said Bill of Entries under Section 18(1) of the

Customs Act, 1962.

In respect of the Bill of Entry No.260/HC/2011-12 Dated

20-03-2012 and Bill of Entry No.261/HC/2011-12 dated 20-03-

2012, the Finalization of Provisional Assessment was done after

lapse of more than 6 years vide Final Assessment Order dated 03-

04-2018 (Annexure-"10") and Final Assessment Order dated 03-

04-2018 (Annexure-"11") respectively passed by the Assistant

Commissioner, Customs Division, Dhamra.

7. Learned counsel further submits that being aggrieved with

finalization of provisional assessment against the aforesaid 2 nos.

of Bill of Entries, the Petitioner carried the matter into appeal

before Commissioner (Appeal), Bhubaneswar Zone. Pending said

two appeals, the Respondent No.4, in respect of Bill of Entry

No.260/HC/2011-12 Dated 20-03-2012 after finalization of

provisional assessment on dated 03-04-2018 issued the impugned

Show Cause Notice dated 20-04-2018 (Annexure-"4") demanding

differential Basic Customs duty of Rs.24,69,401/- under Section

28 of the Customs Act, 1962 along with interest under Section

28AA of the Act on the ground that the imported 'Coal' is not

"Steam Coal" falling under SH 27011920 but "Bituminous Coal"

falling under SH 27011200 and the rate of applicable BCD is @

5% ad-valorem under Sl. No. 124 of Customs Tariff Notification

No. 12/2012-Cus dated 17-03-2012 and not NIL as claimed by

the Petitioner under Sl. No. 123 of the said Notification.

He further submits that similarly in respect of Bill of Entry

No.261/HC/2011-12 Dated 20-03-2012, during pendency appeal

before Commissioner(Appeal) against finalization of provisional

assessment on dated 03-04-2018, the Revenue issued the

impugned Show Cause Notice dated 20-04-2018 (Annexure"5")

demanding differential Basic Customs duty demand of

Rs.24,69,401/- under Section 28 of the Customs Act, 1962 along

with interest under Section 28AA on the ground that the imported

Coal is not "Steam Coal" falling under SH 27011920 but

"Bituminous Coal" falling under SH 27011200 and the rate of

applicable BCD is 5% ad-valorem under Sl. No.124 of Customs

Tariff Notification No. 12/2012-Cus dated 17-03-2012 and not

NIL as claimed by the Petitioner under Sl. No. 123 of the said

Notification.

8. Learned counsel specifically asserted that the Show Cause

Notices are issued under Section 28(1) as no case of collusion,

wilful mis-statement or suppression of facts is alleged and no

penalty for such offences under Section 114A of the Customs Act,

1962 is proposed. The Respondent No.3 vide one earlier Order-in-

Appeal dated 01-08-2022 bearing No. 107-110/CUS/CCP/2022

disposed of the said two appeals against Final Assessment of Bill

of Entry No.260/DC/2011-12 and Bill of Entry No.261/HC/2011-

12 including finalization of two other Bill of Entries, by a common

Order-in-Appeal dated 01-08-2022, set aside the Final

Assessment Orders dated 03-04-2018 (Annexure-10" & Annexure-

11] against which the said appeals were filed before him and

remanded the matter back to the lower authority with a direction

to issue a speaking order after providing reasonable opportunity of

hearing before finalization of the Bill of Entries as per the Section

18(1A) of the Customs Act, 1962 and Regulation 5 and 6 of the

Customs (Finalization of Provisional Assessment) Regulation,

2018.

9. Mr. Kurmi contended that the said Order-in-Appeal dated

01-08-2022 is a subject matter of challenge in W. P. (T) No.4340

of 2022. He further contended that Sub-Section [9] of Section 28

provides for determination of duty and interest within the period

of six months from the date of notice, in respect of case falling

under Clause (a) of sub-Section (1) of Section 28 i.e. where no

collusion, wilful mis-statement or suppression of facts are

involved and within a period of one year as per Clause (b) of

Section 28(9) in respect of cases falling under Section 28(4) i.e.

where no collusion, wilful mis-statement or suppression of facts

are involved.

He strenuously contended further that the words "where it

is possible to do so" under Clause (a) and Clause (b) of Sub-

Section (9) of Section 28 of the Customs Act, 1962 is omitted by

Section 63 of the Finance Act, 2018 (w.e.f. 29-03-2018). Now

Section 28(9) of the Customs Act, 1962 is mandatory and

imperative in character.

He further submits that the second proviso to Section 28(9)

provides that where the Proper Officer fails to determine the

amount of duty, interest within such extended period, such

proceeding shall be deemed to have concluded as if no notice had

been issued and in the instant case no case is made out which

might have prevented the Proper Officer from determining the

amount of duty, interest within the period of six months specified

under Clause (a) of Section 28(9) nor there is any extension of

time limit by any senior Officer in accordance with first proviso to

section 28(9). Even no case under Section 28(9A) is made out by

the proper officer that the proper officer is unable to determine

amount of duty or interest under Section 28(8) for reason of an

appeal in a similar matter is pending before Tribunal, High Court

or Supreme Court or an interim order of stay or the Board has in

a similar matter issued direction or order to keep such matters

pending or Settlement Commission has admitted application of

the concerned person.

10. Learned counsel further submits that no information

for not determining the duty or interest is even communicated to

the Petitioner as mandated U/s 28(9A). It is further submitted by

Ld. Counsel that the proviso to Clause (a) of sub-Section (1) of

Section 28 provides for mandatory pre-show cause notice

consultation. The Respondent No.2 in exercise of powers under

Section 157(2) read with Section 28(1)(a) of the Customs Act, 1962

has framed Pre-Notice Consultation Regulations, 2018 w.e.f. 02-

04-2018 vide Notification No.29/2018-Cus. (NT) dated 02-04-

2018.

It is submitted that under proviso to Section 28(1)(a)

of the Customs Act, 1962 provides that before issuing the show

cause notice, the proper officer shall hold pre-notice consultation

with the person chargeable with duty or interest in such manner

as prescribed under the Pre-Notice Consultation Regulations,

2018. The Respondent No. 4 vide impugned Order-in-Originals

both dated 19- 11-2018 (Annexure-2 & Annexure-3") against two

Show Cause Notices both dated 20-04-2018, (Annexure"4" and

Annexure "5") after lapse of 7 months i.e. beyond limitation of six

months as provided under section 28(9)(a) of the Act in respect of

Bill of Entry No.260/HC/2011-12 dated 20-03-2012 and Bill of

Entry No. 260/HC/2011/12 dated 20-03-2012 arbitrarily

determined the differential Basic Customs duty along with interest

and also imposed equal penalty under Section 112(a) of the Act.

The demand is confirmed under Section 28(1) of the Act.

He reiterated that in the impugned Order, no case of collusion,

wilful mis-statement or suppression of facts under Section 28(4) is

made out and no penalty for such offences is imposed under

Section 114A of the Customs Act, 1962.

11. He further contended that the Respondent No.3 passed the

impugned common Order-in-Appeal dated 10-08-2022 bearing

No.113-114/CUS/CCP/2022 (Annexure"1") and set aside Order-

in-Originals, both dated 20-04-2018 (Annexure "2" & Annexure-

"3"), and remanded the matter back for denovo adjudication

ignoring that the adjudication orders are barred by limitation

under section 28(1)(a) of the Act and the Show Cause Notices are

issued without Pre-Show Cause Notice consultation as provided

under Section 28(9)(a) of the Act which goes to the root of the

matter; hence the entire proceeding is void ab initio nullity and

vitiated.

Further, issuance of the impugned Show Cause Notices

dated 20-04- 2018 i.e. after lapse of more than 6 years from the

date of provisional assessment on 20-03-2012 is barred by

reasonable period of limitation. The said finalization of provisional

assessment is subject matter of challenge in W.P. (T) No. 4340 of

2022.

He further submits that as per Para 3.1 of Chapter 7 of the

Customs Manual Instruction issued by the Respondent No.2 in

exercise of power under Section 151A of the Customs Act, 1962

which is binding upon the department, the provisional

assessment should be finalized within a period of six months

whereas in the instant case provisional assessment is finalized

and the impugned Show Cause Notices are issued after lapse of

more than six months, hence, it is barred by limitation.

It is submitted that when the initial action of finalization of

provisional assessment is not tenable in law the subsequent

proceedings by way of impugned Show Cause Notice, Order-in-

Original and Order-in-Appeal has to fall.

12. So far as W.P.(T) No. 4340 of 2022 is concerned; the

Petitioner has challenged the legality and validity of the common

Order-in- Appeal dated 01.08.2022 (Annexure-1) passed by the

Commissioner (Appeal), GST, Central Excise & Customs,

Bhubaneswar against the Final Assessment Orders dated 26-

.06.2021 (Annexure-2), dated 20/21.09.2021 (Annexure-3), dated

03.04.2018 (Annexure-4) and dated 03.04.2018 (Annexure-5) to

the extent he has remanded the matter back to the Respondent

No.4 for fresh initiation of proceedings for finalization of

provisional assessment under Section 18(2) of the Customs Act,

1962 even though the proceeding is barred by limitation.

The Petitioner by the instant writ petition is further

challenging the legality and validity of impugned Final Assessment

Order dated 26.06.2021 (Annexure-2), dated 20/21.09.2021)

(Annexure-3), dated 03.04.2018 (Annexure-4) and dated

03.04.2018 (Annexure-5) finalizing 4 Bill of Entries No.

158/HC/2012-13 Dated 17.07.2012, No.341/HC/2012-13 Dated

26.11.2012, No.260/HC/2011-12 Dated 20.03.2012 and

No.261/HC/2011-12 Dated 20.03.2012 respectively.

From records it is evident that the aforesaid 4 Bill of

Entries were filed in the year 2012. The Superintendent Customs,

Dhamra Port, in the State of Odisha provisionally assessed the

said Bill of Entries under Section 18(1) of the Customs Act, 1962

on the date of presentation and provisionally permitted clearance

of the imported Steam Coal for home consumption upon payment

of NIL Basic Customs duty and upon payment Countervailing

duty (CVD) @1% as tabulated above (including other Cess etc.).

13. Mr. Kurmi contended that upon provisional assessment of

the aforesaid 4 Bill of Entries, the finalization of assessment was

kept pending in suspended animation sine die for 6 years to 9

years by the Respondent No.4. The "CBIC Customs Manual of

Instructions" under Chapter 7 which deals with Provisional

Assessment, it is mandated by the CBIC Respondent No.2, under

Para 3.1 that, the provisional assessment is expected to be

finalized expeditiously well within 6 months. In respect of the two

Bill of Entry No. 158/HC/2012-13 dated 17-07-2012 and Bill of

Entry No.341/HC/2012-13 dated 26.11.2012 the Finalisation of

Provisional Assessment was done after lapse of more than 9 years

vide Final Assessment Order dated 26.06.2021 (Annexure "2") and

Final Assessment Order dated 20/21.09.2021 (Annexure-"3").

14. In respect of the other two Bill of Entry No.260/HC/2011-

12 Dated 20.03.2012 and Bill of Entry No.261/HC/2011-12 dated

20.03.2012, the Finalization of Provisional Assessment was done

after lapse of more than 6 years vide Final Assessment Order

dated 03.04.2018 (Annexure-4) and Final Assessment Order dated

03.04.2018 (Annexure-5) respectively.

Learned counsel for the Petitioner submits that being

aggrieved with delayed finalization of provisional assessment

against the aforesaid 4 nos. of Bill of Entries by the Respondent

No.4, the Petitioner carried the matter into appeal vide Memo of

Appeals under Section 128 read with Section 128A of the Customs

Act, 1962 before Commissioner (Appeal). Bhubaneswar Zone.

The Respondent No.1 vide Order-in-Appeal dated

01.08.2022 bearing No. 107- 110/CUS/CCP/2022 held that

finalization of provisional assessment after 6-9 years is barred by

limitation while at the same time remanded the matter back to the

lower authority with a direction to issue a speaking order after

providing reasonable opportunity of hearing to the Petitioner.

15. Learned counsel contended that the finalization of

provisional assessment is barred by limitation of 6 months as per

Para 3.1 under Chapter 7 of the "CBIC Customs Manual of

Instruction" and is in violation of natural justice, hence, is without

jurisdiction and a nullity in the eyes of law. The "CBIC Customs

Manual of Instruction which is a compilation of instruction issued

by Respondent No.2 in exercise of power under Section 151A of

the Customs Act, 1962 and is binding on the officers working

under the Customs Act, 1962.

Further in respect of Bill of Entry No.158/HC/2012-13

Dated 17.07.2012 and Bill of Entry No.341/HC/2012-13 Dated

26.11.2012, no show cause notice and/or adjudication order

under Section 28 of the Customs Act, 1962 have been issued as

yet even after lapse of 10 years (one decade), hence, the demand of

duty of Rs 75,76,956/- and Rs.62,83,824/- aggregating to Rs.

1,38,60,780/- is also not sustainable being hopelessly barred by

limitation, and therefore, the Respondent No.3 committed a

serious error by remitting the said matter to the Respondent No.4

for initiation of a fresh proceeding which is arbitrary,

unreasonable and oppressive.

16. Learned counsel for the Revenue submits that M/s. Bihar

Foundry & Castings Limited., (Unit: Gautam Ferro Alloys) Main

Road, Ranchi-834001. Jharkhand, (hereinafter referred to as the

'Petitioner') is an importer and imported Coal through the port of

Dhamra. The Petitioner had imported and cleared South African

Coal in bulk and classified the same under CTH 27011920

declaring as "Steam Coal (Non-Coking)" and paid only 1%

Additional duty (CVD) leviable under Sub-Section (1) of Section 3

of the Customs Tariff Act, 1975, claiming exemption under

Notification No. 12/2012-Cus dated 17.03.2012. The Bills of

Entry were assessed provisionally against PD Bond executed by

the Noticee. The goods under subject Bills of entry were classified

under Tariff item No.27011920 of the Customs Act, 1975.

He further submits that Chapter 27 of the Customs Tariff

Act, 1975 stipulates that for the purpose of sub-heading

27011200 "Bituminous Coal" means coal having a volatile matter

limit (on a dry, mineral-matter-free basis) exceeding 14% and a

calorific value limit (on a moist, mineral-matter-free basis) equal

to greater than 5833 Kcal/Kg. As per the load port test/analysis

report submitted at the time of the Bill of Entry it was found that

the coal declared in B/E have a volatile matter limit exceeds to

14% and calorific value is greater than 5833 Kcal/Kg.

Learned counsel further contended that the coal

imported under the above B/Es is to be classified as "Bituminous

Coal" (Tariff classification - 27011200 instead of "Steam Coal"

(Tariff classification - 27011920) as declared and thus duty would

be as per Notification No. 12/2012-CUS dated 17.03.2012

(SI.No.124) attracting Basis Customs Duty (BCD) @ 5% and

Additional Duty of Customs (CVD) @ 6% under Sub-Section (1) of

Section 3 of the Customs Tariff Act, 1975.

He lastly submits that the Adjudication Orders (O-I-

O), both dated 19.11.2018, against the Show Cause Notices, both

dated 20.04.2018, have been set aside vide Order-in-Appeal No.

113- 114/CUS/CCP/2022 dated 10.08.2022. Hence the instant

Writ Applications are not required and by filing the Writ Petitions,

the Petitioner has tried to consume the valuable time of this

Hon'ble Court.

17. Having heard learned counsel for the parties and after

going through the documents annexed with the respective

affidavits and the averments made therein it transpires that the

Bill of Entries No. 260/HC/2011-12 & No.261/HC/2011-12 are

common to both the Writ Petitions but its provisional assessment

is under Challenge in W.P(T) No.4340 of 2022.

In W.P.(T). No.4340 of 2022, the delayed finalization of

Provisional Assessment of 4 nos. of Bill of Entries including the

above two Bill of Entries are under challenge along with 1 st

Appellate Order against such provisional Assessment of those four

nos. of Bill of Entries.

In W.P.(T). No.5161 of 2022, the two Show Cause Notices

(issued under Section 28 of the Customs Act, 1962, issued after

finalization of Provisional Assessment) & Order-in-Original issued

against two Bill of Entries No.260/HC/2011-12 &

No.261/HC/2011-12 and 1st Appellate Order against Order-in-

Original are the subject matter of challenge.

18. Against, the other two Bill of Entries No.158/HC/2012-13

& No.341/HC/2012-13 which are among the four nos. of Bill of

Entries under challenge in 1st W.P.(T) No.4340 of 2022, no show

cause notice has yet been issued even after lapse of 10 years from

the date of provisional assessment.

From record it is further evident that there is delayed

finalization of the provisional Bill of Entries No.158 / HC / 2012-

13, Bill No. 341/ HC/2012-13, Bill No. 260/ HC/ 2011-12 & Bill

No.261/HC/2011-12; however, the same is contrary to Para 3.1 of

"Chapter 7 Provisional Assessment" of CBIC Manual of

Instructions which is issued by the CBIC in exercise of powers

under Section 151A of the Customs Act, 1962 and which is

binding on the Respondent. For brevity, the same is quoted herein

below: -

3. Finalisation of provisional assessment :

3.1 The provisional assessments are expected

to be finalized expeditiously, well within 6 months.

However, in respect of cases involving machinery contracts or large project imports, where imports take place over long period, such finalisation may take more time since action to can be taken only after all the imports have been made. Here too, effort should be made to finalise the cases within 6 months of the date of import of the last consignment covered by the contract.

[Refer Instructions F. No. 512/5/72-Cus.VI, dated 23- 4-1973; and F. No. 511/7/77-Cus.VI, dated 9-1-1978 and Circular No.17/2011-Cus., dated 8-4-2011]

19. At this stage, it is necessary to refer the case of

Commissioner of Customs Vs. Indian Oil Corporation reported

in 2004 (165) ELT 257 (SC), wherein it has been held by the

Hon'ble Apex Court that the Revenue cannot raise a contention

contrary to binding circular by the Board when circular remains

in operation, Revenue is bound by it (Para - 12).

As per Para 3.1 of the said CBIC instruction, the Bill of

Entries are to be finalized expeditiously well within 6 months. In

the instant case, the finalization of provisional assessment is

governed by Para 3.1 of the CBIC Instruction which is the

reasonable period as under Section 18 of the Customs Act, 1962.

It is true that under Section 18 of the Customs Act, no

period of limitation is prescribed, however, finalization should be

done within reasonable period of limitation. Reference may be

made to the case of K.B. Nagur, M.D. (Ayurvedic) Vs. UOI

reported in (2012) 4 SCC 483 (Para 38)].

20. In the impugned 1st Appellate Order dated 01-08-

2022 the Commissioner (Appeal) which is also under challenge,

Respondent No.3 has held that the finalization of assessment is

barred by limitation under Rule 5 of Customs (Finalisation of

Provisional Assessment) Regulation, 2018 but remanded the

matter for fresh adjudication giving a fresh lease of life to a stale

and time barred claim, which is not sustainable in the eye of law.

Thus, it is clear that the case of the Petitioner is barred by

limitation of 6 months as per Para 3 of Chapter 7 of CBIC Manual

and not as per Rule 5 of 2018 Regulation.

The Commissioner (Appeal) in the impugned 1st Appellate

Order dated 01-08-2022 has held that the finalization of

provisional assessment is barred by limitation. Para 3.1 of the

CBIC Instruction; the limitation under Rule 5 of 2018 Regulation

is applicable prospectively w.e.f. 14-08-2018, is not applicable to

present case as the Bills of Entries are assessed provisionally in

2011-12 and 2012-13 i.e. much before 14-08-2018.

21. It is not out of place here to mention that Rule 5 of

Customs (Finalization of Provisional Assessment) Regulation,

2018 (the 2018 Regulation) applies only to provisional assessment

made after 14-08-2018; hence, in the case at hand it cannot be

applied on the provisional assessments of the 4 Bill of Entries as

they are made in the year 2012. The limitation for finalization to

the case at hand would be governed by Para 3.1 of the CBIC

Instruction as per which the finalization of provisional assessment

is to be made expeditiously, well within 6 months whereas in the

instant case the finalization is done after 6 years to 9 years.

The Punjab & Haryana High Court in the case of Golden

Enterprises Vs. CC reported in 2022 (379) E.L.T 334 (P&H)

under the Customs Act, 1962 while dealing with similar

circumstances following its earlier judgment in the case of Gupta

Smelters Pvt. Ltd Vs UOI reported in 2019 (365) ELT 77, M/s

GPI Textiles Vs. UOI reported in 2018 (362) ELT 388 (P&H) and

judgment of the Gujarat High Court in the case of M/s Siddhi

Vinayak Syntex Pvt. Ltd Vs. UOI reported in 2017 (352) ELT

455 (Guj) wherein the finalization of provisional assessment after

8-9 years from the date of Bill of Entry was quashed considering

that there was no petition by the Petitioner pending before

Competent Court nor was any stay of any court, thus, there was

no reason to withhold framing of final assessment.

22. Further, in the case of Tata Teleservices Ltd Vs. State of

Chhattisgarh reported in 2022(381) E.L.T 145(S.C) the Hon'ble

Apex Court has held that point of limitation is point of jurisdiction

and it goes to the root of the matter. In the instant case; out of the

4 nos. of Bill of Entries, the Bill of Entry No.158/HC/2012-13 was

provisionally assessed on 17-07-2012 under Section 18 of the

Customs Act, 1962 which was finally assessed after 9 years on

26-06-2021 (Annexure - 2).

Further, after finalization no show cause notice under

Section 28 of the Customs Act, 1962 is issued yet even after

expiry of more than 10 years from the date of provisional

assessment. Similarly, Bill of Entry No.341/HC/2012-13 was

provisionally assessed on 26-11-2012 and was finally assessed on

20/21-09-2021 i.e. after 9 years (Annexure 3). Here also, after

finalization no show cause notice under Section 28 of the

Customs Act, 1962 is issued yet even after expiry of more than 10

years from the date of provisional assessment. In respect of Bill of

Entry No.158/HC/2012-13 and Bill of Entry No.341/HC/2012-13

no show cause notice under Section 28 of the Act is yet issued

even after lapse of more than 10 years. The Bill of Entry No.

260/HC/2011-12 was provisionally assessed on 20-03-2012 and

was finally assessed on 03-04-2018 i.e. after 6 years (Annexure-4)

which is subject matter of W.P.(T) No.4340 of 2022. After

finalization, the show cause notice under Section 28 of the Act

was issued on 20-04-2018 (Annexure - 21) and the adjudication

Order was passed on 19-11-2018 (Annexure - 23). The said Show

Cause Notices and adjudication Orders are subject matter of

W.P.(T) No.5161 of 2022.

The Bill of Entry No.261/HC/2011-12 was provisionally

assessed on 20-03-2012 and was finally assessed on 03-04-2018

i.e. after 6 years (Annexure - 5) which is subject matter of W.P.(T)

No.4340 of 2022. After finalization, the Show Cause Notice under

Section 28 of the Customs Act was issued on 20-04-

2018(Annexure-22) and the adjudication Order was passed on 19-

11-2018(Annexure-24). The said Show Cause Notices and

adjudication Orders are subject matter of W.P.(T) No.5161 of

2022.

23. So far as W.P.(T) No. 5161 of 2022 is concerned; in this

writ petition 1st Appellate Order dated 10-08-2022 is challenged

along with legality and validity of two SCNs dated 20-04-2018 and

legality and validity of two Order-in-Original both dated 22-11-

2018, both against two Bill Entries i.e. (Bill of Entry

No.260/HC/2011-12 and Bill of Entry No.261/HC/2011-12

respectively). As discussed herein above; both the impugned

Order-in-Originals dated 19-11-2018 are barred by limitation of 6

months under Section 28(9)(a) of the Customs Act, 1962 which

Respondent No.3 failed to appreciate while passing impugned 1 st

Appellate Order dated 10-08-2022. Due to delayed passing of the

Order-in-Originals, entire proceeding right from impugned SCNs

dated 20-04-2018 deserves to be quashed and set aside.

24. Having regards to the aforesaid discussions we hold that

the 1st Appellate Order dated 10-08-2022 which is challenged

along with validity of aforesaid two show cause notices both dated

20-04-2018 and two adjudication Orders, both dated 19-11-2018,

under Section 28 [against Bill of Entry No.260/HC/2011-12 and

Bill of Entry No.261/HC/2011-12 respectively] is not sustainable

in the eye of law and legal proposition settled by the Hon'ble Apex

Court and various High Courts on the ground that both the

adjudication orders dated 19-11-2018 are passed after expiry of

mandatory period limitation of 6 months as provided under

Section 28(9)(a) of the Customs Act, 1962; further, the impugned

two SCNs dated 20-04-2018 are issued without Pre-SCN

consultation as mandated under proviso to Section 28(10)(a) of

the Customs Act, 1962.

25. As stated herein above; the words "where it is possible

to do so" under clause (a) and (b) of Section 28(9) is omitted by

Section 63(iii)(a) of Act 13 of 2018 w.e.f. 29-03-2018. After

deletion of the said words, the period of limitation under Section

28(9)(a)/(b) are mandatory and imperative in character. Section

28(9)(a) envisages that the proper officer "shall" determine the

amount of duty or interest under Section 28(8) within a period of

6 months from the date of SCN in respect of cases falling under

Section 28(1) i.e. where there is no collusion or wilful mis-

statement or suppression of fact is involved and within a period of

1 years in respect of cases falling under Section 28(4) i.e. where

collusion, wilful mis-statement or suppression of facts are

involved.

26. In view of the above facts we are having no hesitation in

holding that the impugned Order-in-Originals both dated 19-11-

2018 should have been passed within limitation period of 6

months in accordance with Section 28(9)(a) which is mandatory in

character particularly after omission of the words "where it is

possible to do so".

At the cost of repetition, the word; "where it is possible to

do so" which exists under Section 11A(11) of the Central Excise

Act, 1944, is omitted under Section 28(8) of the Customs Act,

1962 w.e.f. 29-03-2018 whereas the impugned Order-in-Originals

were passed on dated 19-11-2018, hence, provisions of Section

28(9) had become mandatory w.e.f. 29-03-2018 which the

Respondent No.3 failed to appreciate while passing the 1 st

Appellate Order dated 10-08-2022 as in the instant case no

extension of time was ever granted for passing the Order-in-

Originals by the competent authorities, facts of which are not

disputed by the Respondent in their Counter Affidavits. Further,

in the instant case, no case of collusion or wilful mis-statement or

suppression of fact is made out. Section 114A of the Customs Act

provides for imposition of penalty in case of collusion, wilful mis-

statement or suppression of facts.

27. Though, penalties are imposed in the Order-in-Originals

under Section 111(d) & (m) and Section 112(a) which does require

ingredients of collusion, wilful mis-statement or suppression of

facts. In the instant case for absence of collusion, wilful mis-

statement or suppression of fact, no penalty under Section 114A

have been imposed, hence, extended period of one year is not

attracted in the instant case.

Further, the mandatory Pre-SCN consultation as mandated

under proviso to Section 28(1)(a) of the Customs Act, 1962 read

with Pre-Notice Consultation Regulation, 2018 are not complied

with while issuing the impugned SCNs both dated 20-04-2018,

hence, the subsequent Order-in-Original both dated 19-11-2018

and the impugned 1st Appellate Order dated 10-08-2022 are bad

in law being void ab initio and a nullity in the eyes of law.

In the Counter Affidavit, the Respondents have not

disputed that no Pre-Notice consultation was extended. The

Respondent accepts that while issuing the impugned SCN, the

Pre-SCN consultation was not done. In the case of Victory

Electric Vehicles International Pvt. Ltd Vs. UOI 2022 (382)

ELT 597(Del) the Hon'ble Delhi High Court while dealing with

exactly similar situation under proviso to Section 28(1)(a) of the

Customs Act, 1962 held that the provisions of Pre-notice

consultation is mandatory in character and held that the Revenue

must scrupulously adhere to the same and due to non-compliance

thereof the adjudication order is liable to be quashed (Refer Para

14.2, Para 18, Para 21 and Para 21.1).

Further, in the case of Competent Authority Vs.

Barangore Jute Factory reported in (2005) 13 SCC 477, it has

been held by the Hon'ble Apex Court that where statute requires

an act to be done in a particular manner, the act has to be done

in that manner along (Para 5).

Similar views have been expressed in the case of A.K. Roy

Vs. State of Punjab reported in (1986) 4 SCC 326 and CIT Vs.

Anjum M.H. Ghaswala reported in (2002) 1 SCC 633.

28. In view of the aforesaid discussions and the judicial pronouncements in the background of the facts of this case, both these writ applications are allowed and pending I.A., if any, is also closed.

(Rongon Mukhopadhyay, J.)

(Deepak Roshan, J.) Amardeep/ AFR