Madras High Court
Nalin Gupta vs Commissioner Of Customs on 7 November, 2024
Author: R.Suresh Kumar
Bench: R.Suresh Kumar, C.Saravanan
W.A.No.2542 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 17.10.2024
Pronounced On 07.11.2024
CORAM:
THE HONOURABLE MR.JUSTICE R.SURESH KUMAR
and
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.A.No.2542 of 2024
and
C.M.P.No.18162 of 2024
Nalin Gupta,
S/o.Late Shri Prem Gupta ... Appellant / Petitioner
Vs.
Commissioner of Customs,
Chennai-II Commissionerate,
Rajaji Salai, Customs House,
Chennai, Tamil Nadu – 600 001. ... Respondent / Respondent
Prayer: Appeal under Clause 15 of the Letters Patent, against the Order dated
08.08.2024 passed in W.P.No.20683 of 2024.
For Appellant : Mr.Sathish Sundar
for Mr.A.Ganesh
For Respondent : Mr.AR.L.Sundaresan
Additional Solicitor General
assisted by Mr.Rajnish Pathiyil
Senior Standing Counsel
https://www.mhc.tn.gov.in/judis
1/37
W.A.No.2542 of 2024
JUDGMENT
(Judgment of the Court was delivered by C.SARAVANAN, J.)
This Writ Appeal is directed against the Impugned Order dated
08.08.2024 passed by the Writ Court in W.P.No.20683 of 2024.
2. By the aforesaid Order, the Writ Court has disposed the writ petition
with the following observations:-
“By consent of both sides, this Writ Petition is taken up
and disposed of at the stage of admission itself.
2. Mr.Rajnish Pathiyil, learned Senior Panel Counsel,
takes notice for the respondent.
3. This Writ Petition has been filed challenging the
impugned Show Cause Notice No.131/2022-Gr-4 in
F.No.S.Misc 131/2022-Gr-4 dated 28.09.2022 and forbearing
the respondent from adjudicating the show cause notice dated
28.09.2022 being barred by limitation in terms of Section
28(9) of the Customs Act, 1962 (in short 'the Act') and
proceedings are deemed to be concluded in view of second
proviso of Section 28(9) of the Act.
4. The learned counsel for the petitioner submitted that
the present show cause notice 28.09.2022 was issued by the
respondent and the same is barred by limitation. However, he
fairly submitted that the petitioner has filed a reply notice and
the matter is at the stage of cross examination and is
adjourned from March 2023 till date without any progress.
He further submitted that the aspect of limitation was also
raised before the authorities concerned, but they have decided
to proceed with the adjudication, despite having no
https://www.mhc.tn.gov.in/judis
jurisdiction. The respondent had initiated the proceedings in
respect of the impugned show cause notice only in June 2024,
after the cross examination was allowed by the Tribunal in
May 2023 and prior thereto, there was no communication by
the respondent. There is no reason whatsoever which
prevented the proper officer from determining the amount of
duty or interest within the period of one year as provided
under Section 28(9) of the Act. Hence, the petitioner is
constrained to approach this Court to challenge the show
cause notice on the aspect of limitation. Therefore, the
petitioner cannot be forced to avail the alternate remedy and
prayed for allowing the writ petition.
5. Learned Senior Panel Counsel appearing for the
respondent would submit that the petitioner has participated
in the enquiry and filed his reply. The matter is pending in
the cross examination stage and it has been adjourned by the
proper officer in terms of Section 28(9) of the Act. He further
submitted that the respondent will complete the entire process
and will pass orders.
6. This Court heard the learned counsel on either side
and also perused the materials placed on record.
7. The preliminary objection of the petitioner is that the
impugned order dated 28.09.2022 is non-est in law and time
barred in view of Section 28(9) of the Act.
8. Considering the fact that the petitioner has filed his
reply and the matter is pending at the stage of cross
examination, the respondent is directed to complete the entire
process and conclude the proceedings in terms of Section
28(9) of the Act.
9. With the above directions, this Writ Petition is
disposed of. No costs. Consequently connected miscellaneous
petitions are closed.”
https://www.mhc.tn.gov.in/judis
3. The aforesaid Writ Petition was filed by the appellant herein for the
following relief:-
“To call for the records on the file of the respondent
pertaining to the impugned show cause notie viz Show Cause
No.131/2022-Gr-4 in F.No.S.Misc 131/2022-Gr-4 dated
28.09.2022 forbearing the respondent from adjudicating the
show cause notice dated 28.09.2022 being barred by
limitation in terms of Section 28(9) of the Customs Act, 1962
and proceedings are deemed to be concluded in view of
second proviso of Section 28(9) of the Customs Act, 1962 and
quash the same.”
4. In this Writ Appeal, the principle ground of attack to the above
mentioned Show Cause Notice dated 28.09.2022 is on the ground of limitation
prescribed under Section 28(9) of the Customs Act, 1962. According to the
appellant, the limitation has aleady expired long before on 27.09.2023 and
therefore, the proceedings initiated by the Principle Commissioner of Customs,
Preventive Commissionerate, Chennai-III in the Show Cause Notice dated
28.09.2022 bearing Ref.F.No.S.Misc.131/2022-Gr-4 had statutorily lapsed.
5. On the other hand, it is the contention of the respondent Customs
Department that under Proviso to Section 28(9) of the Customs Act, 1962, the
time period stands extended up to 27.09.2024 in view of Order/Communication
https://www.mhc.tn.gov.in/judis
dated 07.05.2024 of the Chief Commissioner of Customs, Chennai Customs
Zone, Custom House, Chennai, extending the period of limitation for passing
Order in respect of Show Cause Notice F.No.S.Misc.131/2022-Gr-4 dated
28.09.2022.
6. As per Section 28(9) of the Customs Act, 1962, the proper officer has
to determine the amount of duty or interest under Sub-Section (8) to Section 28
of the Customs Act, 1962,
(a) within six months from the date of notice in respect of cases
falling under clause (a) of sub-section (1);
(b)within one year from the date of notice in respect of cases falling
under sub-section (4).
7. The Show Cause Notice F.No.S.Misc.131/2022-Gr-4 dated 28.09.2022
relates to the period under Section 28(4) of the Customs Act, 1962. As per the
first proviso to Section 28(9) of the Customs Act, 1962 where the proper officer
fails to so determine the amount of duty or interest under Sub-Section (8) to
Section 28 of the Customs Act, 1962 within the specified period therein, any
officer senior in rank to the proper officer may, having regard to the
circumstances of the case under which the proper officer was prevented from
determining the amount of duty or interest under sub-section (8), extend the
https://www.mhc.tn.gov.in/judis
period specified
i. in clause (a) to a further period of of six months and
ii. the period specified in clause (b) to a further period of one year.
8. Section 28(9) of the Customs Act, 1962 reads as under:-
“28. Recovery of [duties not levied or not paid or short-
levied or short-paid] or erroneously.-
(1) ....
(2) ...........
(9) The proper officer shall determine the amount of duty
or interest under sub-section (8),-
(a) within six months from the date of notice
in respect of cases falling under clause
(a) of sub-section (1);
(b)within one year from the date of notice in
respect of cases falling under sub-section
(4):
Provided that where the proper officer fails to so
determine within the specified period, any officer senior in rank
to the proper officer may, having regard to the circumstances
under which the proper officer was prevented from determining
the amount of duty or interest under sub-section (8), extend the
period specified in clause (a) to a further period of six months
and the period specified in clause (b) to a further period of one
year.
9. As per the second proviso to Section 28(9) of the Customs Act, 1962,
https://www.mhc.tn.gov.in/judis
where the proper Officer fails to determine within such extended period, such
proceeding shall be deemed to have concluded as if no notice had been issued.
Second proviso to Section 28(9) of the Customs Act, 1962 reads as under:-
“Provided further that where the proper officer fails to
determine within such extended period, such proceeding shall be
deemed to have concluded as if no notice had been issued.”
10. Further, under Sub-Section (9-A) to Section 28 of the Customs Act,
1962, where the proper officer is unable to determine the amount of duty or
interest under sub-section (8) to Section 28 of the Customs Act, 1962, the law
mandates that the proper Officer shall inform the person concerned the reason
for non-determination of the amount of duty or interest under sub-section (8)
and in such case, the time specified in sub-section (9) shall apply not from the
date of notice, but from the date when such reason ceases to exist under the
following circumstances:-
(a) an appeal in a similar matter of the
same person or any other person is
pending before the Appellate Tribunal
or the High Court or the Supreme
Court; or
(b) an interim order of stay has been
issued by the Appellate Tribunal or the
High Court or the Supreme Court; or
(c) the Board has, in a similar matter,
issued specific direction or order to
keep such matter pending; or
(d) the Settlement Commission has
admitted an application made by the
person concerned.
https://www.mhc.tn.gov.in/judis
11. Sub-Section (9-A) to Section 28 of the Customs Act, 1962 reads as
under:-
“(9-A) Notwithstanding anything contained in sub-section
(9), where the proper officer is unable to determine the
amount of duty or interest under sub-section (8) for the
reason that-
(a) an appeal in a similar matter of the same
person or any other person is pending before
the Appellate Tribunal or the High Court or
the Supreme Court.
(b) An interim order of stay has been issued by
the Appellate Tribunal or the High Court or
the High Court or the Supreme Court; or
(c) the Board has, in a similar matter, issued
specific direction or order to keep such matter
pending; or
(d) the Settlement Commission has admitted an
application made by the person concerned,
the proper officer shall inform the person concerned the
reason for non-determination of the amount of duty or
interest under sub-section (8) and in such case, the time
specified in sub-section (9) shall apply not from the date of
notice, but from the date when such reason ceases to exist.”
12. We had certain doubts as to why there was a delay in taking up the
case for final disposal within the limitation period prescribed under Section
28(9) of the Customs Act, 1962 by the authority?
https://www.mhc.tn.gov.in/judis
13. We also felt that there could be a deliberate attempt on the part of the
respondent Customs Department to let go of the liability of the appellant
pursuant to the Show Cause Notice dated 28.09.2022 in view of the delay in
determining the amount of duty and interest. Therefore, on 20.08.2024 we
called upon the respondent Customs Department to file an affidavit explaining
the reasons for not passing the order within the stipulated time under Section
28(9) of the Customs Act, 1962.
14. On 30.09.2024, we had also directed the respondent Customs
Department to produce the files regarding disciplinary action initiated against
the erring officer, who led to the delay in passing order in the above mentioned
Show Cause Notice dated 28.09.2022.
15. An affidavit dated 17.10.2024 was filed by Mr.H.Rajasekar, the
Assistant Commissioner (Legal) attached to the Office of the Commissioner of
Customs, Chennai-II (Import) Commissionerate, Custom House, Chennai – 1.
It is extracted hereunder:-
“1. I submit that I am working as Assistant Commissioner
(Legal) and I am swearing this Affidavit on behalf of the
Respondent. I am conversant and well acquainted with the facts
https://www.mhc.tn.gov.in/judis
of the case based on the records made available in this office from
the concerned section. This Hon'ble Court on 30.09.2024 had
directed the Respondent to produce the files with regard to the
disciplinary action initiated against the erring officials who had
kept the file without filing an appeal from 16.06.2023 till
29.04.2024 and to also file a supporting affidavit in this regard
and therefore in compliance of the same, the present Affidavit is
being filed. For immediate reference, the relevant portion of the
daily order dated 30.09.2024 in W.A.No.2542 of 2023 is
extracted hereunder:
“2. For continuation of arguments and to produce
the necessary files dealing with the steps taken towards
initiating disciplinary action against the erring officials
who kept the file without filing an appeal from
16.06.2023 till 29.04.2024 without any plausible
reason and to file a supporting affidavit to that effect,
learned Additional Solicitor General seeks time till
16.10.2024.”
2. I submit that the above direction was intimated to the
Respondent vide letter dated 30.09.2024 by the Standing Counsel
for the Department. In this regard, pursuant to the file noting of
the Chief Commissioner dated 19.06.2024 which is also extracted
hereunder, disciplinary action against the erring officers were
initiated:
“This is outright lapse and dereliction of duty of
officers of Preventive Commissionerate & Import
Commissionerate which is detrimental to the interests of
Revenue. For this inaction of officers adversely
affecting Revenue, appropriate Departmental
proceedings should be instituted. The Pr.
Commissioner Preventive & Commissioner Import
must, within 2 weeks refer the names of these officers
responsible along with relevant papers to Pr.
Commissioner of Customs, General for inquiry and
consequent Departmental action against the concerned
officers immediately.”
3. I submit that pursuant to the above noting of the Chief
Commissioner, explanation from the erring officers had been
called for and the officers had also submitted their explanations.
https://www.mhc.tn.gov.in/judis
Having found that the explanations were not satisfactory, the
Competent Authority has issued charge memorandums dated
15.10.2024 to the two erring officers, i.e., Mr.Vinoth Kumar R,
Examiner and Mr.Napolean G, Examiner under Rule 16 of the
CCS (CCA) Rules, 1965 for misconduct and the same would be
proceeded with in accordance with law and as per the CCS
(CCA) Rules, 1965.
4. I submit that in this regard the Charge Memo as well as
the Statement of Imputation of Misconduct in support of the
Articles of Charge is also submitted before the Hon'ble Court in
the form of a Typed Set.”
16. The respondent Customs Department had also enclosed copies of the
Charge Memorandums issued on 15.10.2024 to the following two persons:-
Sl. Date Charge Memo No. Name of the
No. Examiner
1. 15.10.2024 GEN/VIG/MISC/726/2024-CIU Nepolean G
2. 15.10.2024 GEN/VIG/MISC/726/2024-CIU Vinoth Kumar R
17. At this stage, we do not want to make any observation on the
disciplinary proceedings initiated against these two persons. The case of the
appellant is that limitation for passing order had expired on 27.09.2023 itself
under Section 28(9) of the Customs Act, 1962.
18. In support of his contention, the learned counsel for the appellant has
relied on the following decisions rendered by the Hon'ble Supreme Court,
https://www.mhc.tn.gov.in/judis
Bombay High Court, Gujarat High Court as well as this Court:-
i. Institute of Chartered Accountants of India Vs. L.K.Ratna and
others, (1986) 4 SCC 537.
ii. Union of India and others Vs. E.G.Nambudiri, (1991) 3 SCC 38.
iii. Neelima Misra Vs. Harinder Kaur Paintal and others, (1990) 2 SCC
iv. Yoginath D.Bagde Vs. State of Maharashtra and another, (1999) 7
SCC 739.
v. Sahara India (Firm), Lucknow Vs. Commissioner of Income Tax,
Central-I and another, (2008) 14 SCC 151.
vi. Steel Authority of India Vs. Collector of Customs, Bombay, (2001) 9
SCC 198.
vii. State of Punjab and others Vs. Shreyans Industries Limited and
others, (2016) 4 SCC 769.
viii. Maneklal Chunilal & Sons Limited Vs. The Commissioner of Income
Tax (Central) Bombay, 1953 SCC OnLine Bom 38.
ix. Flexoplast Abrasives (India) Limited Vs. Union of India and others,
1980 (6) E.L.T. 513 (Bom.).
x. Wipro Products Limited Vs. Union of India, 1981 (8) E.L.T. 531
https://www.mhc.tn.gov.in/judis
(Bom.).
xi. Karnavati Club Limited. Vs. Union of India, 2010 (20) S.T.R. 169
(Guj.).
xii. C.Solomon Selvaraj Vs. Principal Commissioner of Customs,
Chennai in W.P.No.1738 of 2021 dated 13.10.2023.
19. From the case of 'C.Solomon Selvaraj (cited supra) of this Court, the
learned counsel for the appellant has referred to Paragraphs 53 to 59. They are
reproduced below:-
“53.On the other hand, in respect of cases filing under
Section 28(9)(4) of the Customs Act, 1962, the proper officer
has to determine the amount of duty or interest under Sub-
Section (8)of the Customs Act, 1962, within a period of one
year from the date of the notice.
54.Ordinarily, the said Show Cause Notice bearing
Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 dated
18.06.2018 ought to have adjudicated by the proper officer on
or before 17.06.2019 in terms of Section 28(9)(b) of the
Customs Act, 1962.
55.Under proviso to Section 28(9) of the Customs Act,
1962 after amendment, any officer senior in rank to the
“proper officer” may extend the period specified in clause (a)
by a further period of six months and the period specified in
clause (b) by a further period of one year having regard to
the circumstances under which the “proper officer” was
prevented from determining the amount of duty or interest
under Sub-Section (8) to Section 28 of the Customs Act, 1962.
https://www.mhc.tn.gov.in/judis
56.If the proper officer fails to determine the amount or
interest Sub-Section (8) to Section 28 of the Customs Act,
1962, within such extended period, the show cause
proceeding issue shall be deemed to have concluded as if no
notice had been issued.
57.Thus, the period specified in Section 28(9)(a) or (b)
of the Customs Act, 1962 as the case may be could be
extended by a senior officer in rank to the proper officer for a
period of six months or one year as the case may be, if the
“proper officer” was prevented from determining the amount,
duty or interest within the period specified therein.
58.To decide whether the period was extended for
completing the show cause for determining the duty within
the limitation prescribed under Section 28(9) of the Customs
Act, 1962, the originals of the files were called for and
examined.
59.Facts on record indicates that the relied upon
documents were sought by the petitioner vide letter dated
15.10.2018. The relied upon documents were sent to the
petitioner after obtaining permission of the Commissioner-
VIII along with notice dated 19.11.2018.”
20. On the other hand, it is the contention of the respondent Customs
Department that although the initial period of limitation had expired on
27.09.2023, however, by virtue of the extension granted by the Chief
Commissioner of Customs, Chennai Customs Zone, Custom House, Chennai on
07.05.2024 under first proviso to Section 28(9) of the Customs Act, 1962, the
time for completing the assessment was still available till 27.09.2024 and
https://www.mhc.tn.gov.in/judis
therefore, the Impugned Order of the learned Single Judge dismissing/disposing
the Writ Petition, does not call for any interference.
21. The learned Additional Solicitor General of India has relied on the
following decision of this Court:-
i. C.Solomon Selvaraj Vs. Principal Commissioner of Customs, Chennai
in W.P.No.1738 of 2021 dated 13.10.2023.
22. The learned Additional Solicitor General of India would submit that
question for extending the limitation under the proviso to Section 28(9) of the
Customs Act, 1962 will arise only after the initial period of six months or one
year as the case may be had expired. It is therefore submitted that since the
Chief Commissioner of Customs, Chennai Customs Zone, Custom House,
Chennai has exercised the power on 07.05.2024, the respondent Customs
Department should be allowed to proceed with the Show Cause Notice dated
28.09.2022 bearing Ref.F.No.S.Misc.131/2022-Gr-4.
23. We had heard at length over a period of time. We have considered the
submissions of the learned counsel for the appellant and the learned Additional
Solicitor General of India for the respondent.
https://www.mhc.tn.gov.in/judis
24. The point for consideration is whether the proceedings initiated in the
Show Cause Notice dated 28.09.2022 can be continued in the light of the
extension granted by the Chief Commissioner of Customs, Chennai Customs
Zone, Custom House, Chennai on 07.05.2024 under the first proviso to Section
28(9) of the Customs Act, 1962.
25. The facts on record reveal that the Show Cause Notice was issued on
28.09.2022. The said Show Cause Notice was issued under Section 28(4) of
the Customs Act, 1962 read with Section 124 of the Customs Act, 1962 by the
Commissioner of Customs, Chennai-II (Import) Commissionerate and
answereable to the same Officer.
26. The appellant made a request on 10.04.2023 for cross-examination of
the persons whose names were shown in the said Show Cause Notice dated
28.09.2022. This was even without a reply to the Show Cause Notice.
27. The request dated 10.04.2023 of the appellant was rejected by the
Deputy Commissioner of Customs (Adjudication), Chennai-III vide a
communication bearing FS/GEN/ADJ/COMM/370/2022-Adjn, DIN
No.20230473MY000092149 dated 19.04.2023.
https://www.mhc.tn.gov.in/judis
28. Thus, it is evident that the request on 10.04.2023 was made almost
after the expiry of a period of six months and ten days from the date of receipt
of the Show Cause Notice dated 28.09.2022. This request was turned down by
an Officer inferior to the Adjudicating Officer to whom the petitioner was made
answerable to the said Show Cause Notice dated 28.09.2022.
29. Aggrieved by the aforesaid Order dated 19.04.2023 of the Deputy
Commissioner of Customs (Adjudication), Chennai-III, strangely, an appeal was
filed by the appellant vide Appeal Diary No.401592023 before the Customs,
Excise and Service Tax Appellate Tribunal (CESTAT) as if the Commissioner of
Customs, Chennai-I Commissionerate had passed Order and arrayed the
Commissioner of Customs, Chennai-I Commissionerate as the respondent and
that the appellant was aggrieved by an Order of the Commissioner of Customs,
Chennai-I Commissionerate.
30. Curiously, the Customs, Excise and Service Tax Appellate Tribunal
(CESTAT) has also entertained the appeal at the diary stage and had allowed the
same vide its Order dated 26.05.2023 after hearing the appellant and the
https://www.mhc.tn.gov.in/judis
respondent on 04.05.2023 in the light of the decision of the Hon'ble Supreme
Court in Andaman Timber Industries Vs. Commissioner of Central Excise,
Kolkata-II, [2015 (324) E.L.T. 641 (S.C.)] and the decision of the Hon'ble
Supreme Court in M/s.Kanungo & Co. Vs. Collector of Customs, Calcutta
and others, [1983 (13) E.L.T. 1486 (S.C.)] and few other decisions of CESTAT
referred to the said order.
31. Clearly, the order that was passed by the Deputy Commissioner of
Customs (Adjudication), Chennai-III on 19.04.2023 bearing
FS/GEN/ADJ/COMM/370/2022-Adjn, DIN No.20230473MY000092149 was
itself without jurisdiction even though the request dated 10.04.2023 of the
appellant was addressed to the Principle Commissioner of Customs, Preventive
Commissionerate, Chennai-III.
32. That apart, even if a wrong Order was passed by the the Deputy
Commissioner of Customs (Adjudication), Chennai –III, the appellate remedy if
any for the appellant, would have been only before the Appellate Commissioner
under Section 128 of the Customs Act, 1962 and not before CESTAT under
Section 129-A of the Customs Act, 1962.
https://www.mhc.tn.gov.in/judis
33. As per Section 128 of the Customs Act, 1962, any person aggrieved
by any decision or Order passed under the Act by an Officer of customs who is
lower in rank than a Principal Commissioner of Customs or Commissioner of
Customs, may appeal to the Commissioner (Appeals) within sixty days from the
date of the communication to him of such decision or Order. Thus, the Order
dated 19.04.2023 of the Deputy Commissioner of Customs (Adjudication),
Chennai-III bearing FS/GEN/ADJ/COMM/370/2022-Adjn, DIN
No.20230473MY000092149 was passed without jurisdiction. As a sequitur,
Order dated 04.05.2023 allowing the request of the appellant by CESTAT in
Appeal Diary No.401592023 was also without jurisdiction.
34. As per Section 129-A (1) of the Customs Act, 1962, any person
aggrieved by an Order of the following authorities may file an appeal before
CESTAT, namely:-
(a) an order passed by the Commissioner (Appeals)
under section 128-A;
(b)an order passed by the Board or the Appellate
Principal Commissioner of Customs or
Commissioner of Customs under section 128, as
it stood immediately before the appointed day;
(c) an order passed by the Board or the Principal
Commissioner of Customs or Commissioner of
Customs under section 128, as it stood
immediately before the appointed day;
(d)an order passed by the Board or the Principal
https://www.mhc.tn.gov.in/judis
Commissioner of Customs or Commissioner of
Customs, either before or after the appointed
day, under section 130, as it stood immediately
before that day.
35. There is also an embargo on certain appeal to be filed before CESTAT
under first proviso to Section 129-A (1) of the Customs Act, 1962. The first
proviso reads as follows:-
“Provided that no appeal shall lie to the Appellate Tribunal
and the Appellate Tribunal shall not have jurisdiction to decide any
appeal in respect of any order referred to in clause (b) if such
order relates to,-
(a) any goods imported or exported as baggage;
(b)any goods loaded in a conveyance for importation into
India, but which are not unloaded at their place of
destination in India, or so much of the quantity of such
goods as has not been unloaded at any such destination if
goods unloaded at such destination are short of the quantity
required to be unloaded at that destination;
(c) payment of drawback as provided in Chapter X, and the
rules made thereunder.
36. Further, as per the second proviso to Section 129-A (1) of the
Customs Act, 1962, CESTAT may in its discretion refuse to admit an appeal in
respect of an Order referred to in Clause (b), (c) or (d) of Section 129-A (1) of
the Customs Act, 1962 where
i. the value of the goods confiscated without option having
been given to the owner of the goods to pay a fine in lieu
of confiscation under section 125; or
ii. in any disputed case, other than a case where the
determination of any question having a relation to the
https://www.mhc.tn.gov.in/judis
rate of duty of customs or to the value of goods for
purposes of assessment is in issue or is one of the points
in issue, the difference in duty involved or the duty
involved; or
iii. the amount of fine or penalty determined by such order.
37. For the sake of clarity, Section 128 and Section 129-A (1) of the
Customs Act, 1962 are reproduced below:-
Section 128 Section 129-A (1)
128. Appeals to Commissioner 129-A (1) Appeals to the
(Appeals).- Appellate Tribunal.-
(1) Any person aggrieved by any (1) Any person aggrieved by any
decision or order passed under of the following orders may
this Act by an officer of customs appeal to the Appellate Tribunal
lower in rank than a Principal against such order-
Commissioner of Customs or
Commissioner of Customs may (a) a decision or order passed by
appeal to the Commissioner the Principal Commissioner of
(Appeals) within sixty days from Customs or Commissioner of
the date of the communication to Customs as an adjudicating
him of such decision or order: authority;
Provided that the Commissioner (b) an order passed by the
(Appeals) may, if he is satisfied Commissioner (Appeals) under
that the appellant was prevented section 128-A;
by sufficient cause from
presenting the appeal within the (c) an order passed by the Board
aforesaid period of sixty days, or the Appellate Principal
allow it to be presented within a Commissioner of Customs or
further period of thirty days. Commissioner of Customs under
section 128, as it stood
(1-A) The Commissioner immediately before the appointed
(Appeals) may, if sufficient cause day;
is shown at any stage of hearing
https://www.mhc.tn.gov.in/judis
Section 128 Section 129-A (1)
of an appeal, grant time, from (d) an order passed by the Board
time to time, to the parties or any or the Principal Commissioner of
of them and adjourn the hearing Customs or Commissioner of
of the appeal for reasons to be Customs, either before or after
recorded in writing: the appointed day, under section
130, as it stood immediately
before that day:
Provided that no such
adjournment shall be granted Provided that no appeal shall lie
more than three times to a party to the Appellate Tribunal and the
during hearing of the appeal. Appellate Tribunal shall not have
jurisdiction to decide any appeal
(2) Every appeal under this in respect of any order referred to
section, shall be in such form and in clause (b) if such order relates
shall be verified in such manner to,-
as may be specified by rules
made in this behalf. (a) any goods imported or
exported as baggage;
(b) any goods loaded in a
conveyance for importation into
India, but which are not
unloaded at their place of
destination in India, or so much
of the quantity of such goods as
has not been unloaded at any
such destination if goods
unloaded at such destination are
short of the quantity required to
be unloaded at that destination;
(c) payment of drawback as
provided in Chapter X, and the
rules made thereunder:
Provided further that the
Appellate Tribunal may, in its
https://www.mhc.tn.gov.in/judis
Section 128 Section 129-A (1)
discretion, refuse to admit an
appeal in respect of an order
referred to in clause (b) or clause
(c) or clause (d) where-
(i) the value of the goods
confiscated without option
having been given to the owner
of the goods to pay a fine in lieu
of confiscation under section
125; or
(ii) in any disputed case, other
than a case where the
determination of any question
having a relation to the rate of
duty of customs or to the value of
goods for purposes of assessment
is in issue or is one of the points
in issue, the difference in duty
involved or the duty involved; or
(iii) the amount of fine or penalty
determined by such order.
38. If the said Order dated 19.04.2023 was passed by Principal
Commissioner of Customs or the Commissioner of Customs, Chennai-I
Commissionerate the so called appeal filed by the appellant in Appeal Diary
No.401592023 which was allowed on 26.05.2023 vide Interim Order No.40048
https://www.mhc.tn.gov.in/judis
of 2023 could have been entertained by CESTAT under Section 129-A of the
Customs Act, 1962.
39. Thus, Interim Order No.40048 of 2023 dated 26.05.2023 that was
passed by CESTAT in Appeal Diary No.401592023 itself was a nullity and
without jurisdiction. The Application in Appeal Diary No.401592023 is not
permissible even under Rule 28C of CESTAT (Procedure) Rules, 1982. As
such, CESTAT ought not to have been entertained such an appeal.
40. An appeal, if any, ought to have been filed against the Interim Order
No.40048 of 2023 dated 26.05.2023 under Section 130 of the Customs Act,
1962 within a period of 180 days from the date of its communication. Thus, the
appeal if any ought to have been filed by 30.11.2023. Ideally, a Writ Petition
ought to have been filed as Order dated 26.06.2023 of CESTAT in Appeal Diary
No.401592023 as it was a nullity in the eye of law and without jurisdiction.
41. Be that as it may, as against the aforesaid Order passed by CESTAT
on 26.05.2023 which is said to have been communicated to the respondent on
30.05.2023, a decision was taken to file an appeal before this Court under
Section 130 of the Customs Act, 1962. This is evident from a reading of letter
dated 03.05.2024 of the Chief Commissioner of Customs (In-Situ), Chennai-III
https://www.mhc.tn.gov.in/judis
(Preventive) Commissionerate, Office of the Principal Commissioner of
Customs (Preventive), Chennai addressed to the Commissioner of Customs,
Chennai II Import Commissionerate, Chennai seeking for extension of time for
passing Order under the proviso to Section 28(9) of the Customs Act, 1962.
The said communication reads as follows:-
“3. During the course of adjudication proceedings, the
noticee's request for cross-examination of the co-
noticees/witnesses was denied vide this office letter dated
19.04.2023. Aggrieved by the said denial, the party went on an
appeal before the Hon'ble CESTAT, and obtained an Interim
Order No.40048/2023 dated 26.05.2023 wherein Hon'ble
CESTAT has set aside the communication denying right to
cross-examination as not sustainable and directed the
adjucating authority to allow cross-examination of any
person/whose statements are sought to be relied upon or used
against the petitioner before passing the adjudication order.
4. As the said order was not acceptable, Preventive
Commissionerate requested Import Commissionerate to file an
appeal against the Interim Order before the Hon'ble High Court
within the time limit. The file was forwarded to Import
Commissionerate along with this office letter dated 16.06.2023
(copy enclosed) enclosing Grounds of Appeal for filing the
appeal on 16.06.2023. Vide letters dated 06.11.2023 and
04.04.2024. CCO was informed by this Commissionerate that
the said file had been transferred to Import Commissionerate,
under intimation to Import Commissionerate.
5. At this juncture, Import Commissionerate has returned
the said file to Preventive Commissionerate on 29.04.2024,
with a letter dated 29.04.2024 (copy enclosed), stating that
inadvertently the file was not attended during transfer of
charges and the time period for filing appeal against the
Hon'ble CESTAT order dated 26.05.2023 before the Hon'ble
High Court had expired; that the Adjudicating Authority may
proceed with the adjudication proceedings allowing cross-
https://www.mhc.tn.gov.in/judis
examination of the witnesses as directed by Hon'ble CESTAT.
6. It is submitted that the Show Cause Notice in the
impugned case has been issued under Section 28(4) of the
Customs Act, 1962 on 28.09.2022 and the time limit for
completing the adjudication as per Section 28(9)(b) of the Act
ibid, had expired on 28.09.2023.
7. In view of the foregoing, it is requested that the Chief
Commissionerate of Customs may kindly extend the time limit
for Adjudication in the instant case by 1 year as per second
proviso to the Section 28(9) of the Customs Act, 1962. The
extension will facilitate cross-examination requeted by the
noticee and comprehensive examination of the case
records/submissions of the importer to arrive at a judicious
decision within the canons of natural justice.”
42. Thus, a reading of the above communication/request dated
03.05.2024 of the Chief Commissioner of Customs (In-Situ), Chennai-III
(Preventive) Commissionerate, Office of the Principal Commissioner of
Customs (Preventive), Chennai addressed to the Commissioner of Customs,
Chennai II Import Commissionerate, Chennai, seeking an extension of time for
passing Order under the first proviso to Section 28(9) of the Customs Act, 1962
indicates that the Office of the Principal Commissioner of Customs (Preventive),
Chennai had requested the Commissioner of Customs, Chennai II Import
Commissionerate, Chennai to file an appeal before this Court purportedly under
Section 130 of the Customs Act, 1962 although ideally a Writ Petition ought to
have been filed against Interim Order No.40048 of 2023 dated 26.05.2023, as
the Order was passed without jurisdiction.
https://www.mhc.tn.gov.in/judis
43. Thus, it is clear that the Principal Commissioner of Customs
(Preventive), Chennai proposed to file an appeal against the Interim Order
No.40048 of 2023 dated 26.05.2023 in Appeal Diary No.401592023 secured
by the appellant by forwarding Grounds of Appeal to the Commissioner of
Customs, Chennai II Commissionerate, Chennai.
44. It is strange that the Commissioner of Customs, Chennai II Import
Commissionerate, Chennai, has returned the file to the Office of the Principal
Commissioner of Customs (Preventive), Chennai on 29.04.2024 stating that the
file was “inadvertently” not attended during transfer of charges and the time
period for filing an appeal against CESTAT Interim Order dated 26.05.2023 in
Appeal Diary No.401592023 before the High Court had expired and that the
adjudicating authority may therefore proceed with the adjudication by allowing
cross-examination of the witnesses as directed by CESTAT.
45. It appears that subsequently the cross-examination was also allowed
on 19.06.2024 pursuant to Interim Order dated 26.05.2023 of CESTAT in
Appeal Diary No.401592023.
https://www.mhc.tn.gov.in/judis
46. It is thereafter W.P.No.20683 of 2024 was filed on 22.07.2024 by the
appellant before this Court which has culminated in the Impugned Order dated
08.08.2024 of the Writ Court.
47. A reading of Section 28(9) (a) and (b) of the Customs Act, 1962
makes it clear that at the expiry of six months or one year as the case may be,
from the date of Show Cause Notice, the concerned proper officer who was to
adjudicate the Show Cause Notice would have become functus officio. It is only
thereafter, any senior officer in rank to the proper officer can extend the period
by six months or one year as is stipulated in Section 28(9)(a) and (b) of the
Customs Act, 1962 under proviso to it.
48. It is therefore clear that the question of granting extensions under the
first proviso to Section 28(9) of the Customs Act, 1962 will arise only after the
limitation for passing Order determining duty or interest, as the case may be,
within the time stipulated under Section 28(9) of the Customs Act, 1962 had
expired.
49. Therefore, only after the period of six months or one year, as the case
may be, the senior officer could extend the period by another six months or one
https://www.mhc.tn.gov.in/judis
year specified in Clause (a) and Clause (b) under the first proviso to Section
28(9) of the Customs Act, 1962. The second proviso to Section 28(9) of the
Customs Act, 1962, further contemplates abatement of the proceedings if after
the extension period under the first proviso to Section 28(9) of the Customs Act,
1962, no Orders are passed.
50. The clarification of the Commissioner of Customs, NS-IV, Mumbai
Customs Zone-II, Nhava Sheva, Raigad-400 707 in Standing Order No.12/2018
dated 25.04.2018 was issued in the wake of amendment to Section 28(9) of the
Customs Act, 1962 vide Finance Act, 2018 (13 of 2018). The clarification
issued therein itself is a non-application of mind as the second proviso to
Section 28(9) of the Customs Act, 1962 deals with abatement of the
proceedings after extension is granted. It is irrelevant.
51. The argument of the learned counsel for the appellant that the
standing orders have been issued by various Commissionerates for the
procedures to be adopted for processing of adjudication files is merely a
guideline for ensuring that there is no lapsing of proceeding under Section 28 of
the Customs Act, 1962. The Standing Orders of other Commissionerates were
issued in the light of the amendment to Section 28 of the Customs Act, 1962,
https://www.mhc.tn.gov.in/judis
which prescribed the time limit for adjudication that where there are justifiable
ground to seek extensions as provided under second proviso (actually first
proviso) to Section 28(9) of the Customs Act, 1962, adjudication files should be
put up before the officer authorized to grant such extensions atleast 30 days
prior to the time limit of six months or one year as the case may be.
52. In any event, the said Standing Order No.12/2018 dated 25.04.2018
of another Commissionerate cannot be said to be binding either on the
respondent Customs Department or on this Court as it has no statutory force of
law. At best, it is an procedure to be adopted by the ranks within whose
jurisdiction it has been issued.
53. In this case, the appellant has not been filed a reply to the Show
Cause Notice dated 28.09.2022. Only, a request was made by the appellant for
cross-examining the persons named in the Show Cause Notice dated
28.09.2022 as per the decisions of the Hon'ble Supreme Court in Andaman
Timber Industries (cited supra) and in M/s.Kanungo & Co. (cited supra),
long after the receipt of Show Cause Notice dated 28.09.2022 on 10.04.2023.
54. As mentioned above, the request was rejected by the Deputy
https://www.mhc.tn.gov.in/judis
Commissioner of Customs (Adjudication), Chennai-III vide a communication
bearing reference FS/GEN/ADJ/COMM/370/2022-Adjn, DIN
No.20230473MY000092149 dated 19.04.2023, even though the said Officer
was not concerned with the adjudication of the Show Cause Notice dated
28.09.2022. Thus, the proceedings got derailed for further illegality by the said
Officer.
55. The decision taken to file an appeal before the High Court was
transferred on 16.06.2023. The file was returned by the Commissioner of
Customs, Chennai II Import Commissionerate, Chennai, on 29.04.2024 as the
limitation for filing an appeal against CESTAT Order dated 26.05.2023 had
expired.
56. Therefore, a decision appears to have been rightly taken on
29.04.2024 for getting extension. It is also strange to note that no steps was
taken by the Customs Department to file appeal with an application for
condonation of delay. That apart, since the Order of the Deputy Commissioner
of Customs (Adjudication), Chennai-III dated 19.04.2023 bearing reference
FS/GEN/ADJ/COMM/370/2022-Adjn, DIN No.20230473MY000092149 was
without jurisdiction, the correct remedy that was available was to file a Writ
Petition under Article 226 of the Constitution of India.
57. There are indications that the entire statutory safeguards under the
https://www.mhc.tn.gov.in/judis
Acts have been attempted to be prevaricated by the Officials of the Customs
Department to allow the appellant and the co-noticees go scot free in the show
cause proceedings. There appears to be large-scale complicity on the part of the
officials of the Customs Department from the senior to junior ranks to allow the
appellant and his co-noticee to get away. Mere initiation of the disciplinary
proceedings against two officials is not sufficient. The seniors, who are involved
also should be proceeded. The Deputy Commissioner of Customs
(Adjudication), Chennai-III, who passed Order dated 19.04.2023 bearing
reference FS/GEN/ADJ/COMM/370/2022-Adjn, DIN
No.20230473MY000092149 should be also explained as to why he decided to
pass the Order when he was not the proper officer to adjudicate the Show Cause
Notice. He should be proceeded and if he was acting on the instructions of his
superiors. Such superiors should be also proceeded departmentally.
58. Since the cross-examination of the witnesses was allowed and
conducted on 19.06.2024, W.P.No.20683 of 2024 filed on 22.07.2024 was
clearly without any merits and has been rightly rejected. The respondent is
directed to complete the adjudication proceedings as expeditiously as possible.
The time taken before various forums including this Court i.e., both before the
Writ Court and before us in this Writ Appeal till the date of receipt of this copy
shall stand excluded for computation of limitation under Section 28(9) of the
https://www.mhc.tn.gov.in/judis
Customs Act, 1962.
59. In view of the above discussion, we find no reasons to interfere with
the Impugned Order dated 08.08.2024 in W.P.No.20683 of 2024 passed by the
learned Single Judge of this Court.
60. While disposing the present Writ Appeal, we also make it clear that
the question of entertaining an application for cross-examination of the
witnesses without any reply on merits by a notice in a show cause proceeding is
to be eschewed and should not to be allowed.
61. We also direct that the Principal Commissioner of Customs
(Preventive), Chennai to refer the entire file to the Vigilance Department starting
from the events surrounding the passing of the Order dated 19.04.2023 bearing
reference FS/GEN/ADJ/COMM/370/2022-Adjn, DIN
No.20230473MY000092149 by the Deputy Commissioner of Customs
(Adjudication), Chennai-III and initiate a detailed probe and thereafter initiate
appropriate proceedings for corruption, if any, not only against two (2)
Subordinate Officers of the Customs Department against whom proceedings
said to have been initiated but also against those Senior Officers of the Customs
https://www.mhc.tn.gov.in/judis
Department who may have shown complicity and were responsible in the delay
in the adjudication of Show Cause Notice dated 28.09.2022 by perpetrating
fraud on the Customs Department. There is a large scale subterfuge and
prevarication of safeguards. The above proposal shall be in addition to the
disciplinary proceedings under the provisions of the Central Civil Services Rules
or such other rules as may be applicable to the officers of the Customs
Department against all those officers involved in the fraud.
62. The respondent shall file a status report regarding the steps taken in
this direction within six months before this Court from today.
63. For the reasons stated above, we are of the view that the present writ
appeal is liable to be dismissed.
64. This Writ Appeal has become infructuous in the light of
communication dated 07.05.2024 of the Chief Commissioner of Customs,
Chennai Customs Zone, Custom House, Chennai, extending the period of
limitation under the first proviso to section 28(9) of the Customs Act, 1962.
65. In the result, this Writ Appeal is dismissed. No costs. Connected
https://www.mhc.tn.gov.in/judis
Civil Miscellaneous Petition is closed.
66. List this Appeal on 9th of June 2025 for reporting compliance.
[R.S.K., J.] [C.S.N., J.]
07.11.2024
Index : Yes/No
Internet : Yes/No
Speaking Order/Non-Speaking Order
Neutral Citation : Yes/No
arb
To
Commissioner of Customs,
Chennai-II Commissionerate,
Rajaji Salai, Customs House,
Chennai, Tamil Nadu – 600 001.
https://www.mhc.tn.gov.in/judis
R.SURESH KUMAR, J.
and
C.SARAVANAN, J.
arb
Pre-Delivery Judgment in W.A.No.2542 of 2024
https://www.mhc.tn.gov.in/judis
07.11.2024
https://www.mhc.tn.gov.in/judis
