Multi Arc India Ltd. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. the question for consideration in this appeal is whether the notice issued to the appellant under section 28 of the act demanding duty alleged to have been short paid is barred by limitation or not.2. the facts in dispute are as follows. the appellant had registered contract with the bombay customs house under the project import regulations, 1986 in order to claim classification of the goods imported by it in heading 98.01 of the tariff and thereafter proceeded to import goods. the goods which were imported in 1995-96 were provisionally assessed to duty pending finalisation of the contract.the date of finalisation of the contract is not clear. however it is clear that subsequent to the finalisation, an order was passed by the assistant commissioner on 3-8-1999 ordering refund of the amount deposited by the appellant as a security when its contract was registered. the notice alleging short levy is dated 29-1-2000.3. before the deputy commissioner and the commissioner (appeals), the appellant had taken the stand that the notice was received by it on 6-2-2000 and was clearly beyond the period provided in section 28 of the act of six months from the relevant date, such relevant date being the date on which the provisional assessment was finalised. neither of these authorities has accepted this contention.4. representative of the appellant raises the argument before me adding in addition, that even if it is accepted that the date of sanction of the refund of the security deposit, the demand is still barred by limitation. the notice was required to be served within six months of that date i.e. on or before 3-2-2000, whereas it has only been received by the appellant on 6-2-2000. he tenders an envelope which bears on it the number of the show cause notice and evidently contained it, which shows the customs house franking dated 4-2-2000, on the same date it was tendered to the general post office, mumbai.5. the departmental representative contends that the notice deemed to have been served on the date on which it was tendered to the post office and therefore within time. this last contention is clearly not acceptable. the notice is required to be served within six months of (five months from the relevant date) it is not enough if it has merely been given to the post office for transmission to the person concerned [cc, bombay v. presto works - 1987 (28) e.l.t. 469 (tribunal)]. i have noted the argument of the representative of the appellant that the refund of the security deposit is in no way an act of adjustment of duties after finalisation of provisional assessment, the deposit itself is given even prior to any import. even assuming in favour of the department that the date of refund of this security deposit is the relevant date from which period of limitation commenced to run, the notice is still barred by limitation, the refund having been sanctioned on 3-8-1999, the notice ought to have been served on the appellant on or before 3-2-2000. the fact that this could not have been done is clear from the fact that it is only that the customs house on 4-2-2000 tendered the envelope to the post office. the period of limitation had already expired. the demand is thus clearly barred by limitation.

Judgment:
1. The question for consideration in this appeal is whether the notice issued to the appellant under Section 28 of the Act demanding duty alleged to have been short paid is barred by limitation or not.

2. The facts in dispute are as follows. The appellant had registered contract with the Bombay Customs House under the Project Import Regulations, 1986 in order to claim classification of the goods imported by it in Heading 98.01 of the tariff and thereafter proceeded to import goods. The goods which were imported in 1995-96 were provisionally assessed to duty pending finalisation of the contract.

The date of finalisation of the contract is not clear. However it is clear that subsequent to the finalisation, an order was passed by the Assistant Commissioner on 3-8-1999 ordering refund of the amount deposited by the appellant as a security when its contract was registered. The notice alleging short levy is dated 29-1-2000.

3. Before the Deputy Commissioner and the Commissioner (Appeals), the appellant had taken the stand that the notice was received by it on 6-2-2000 and was clearly beyond the period provided in Section 28 of the Act of six months from the relevant date, such relevant date being the date on which the provisional assessment was finalised. Neither of these authorities has accepted this contention.

4. Representative of the appellant raises the argument before me adding in addition, that even if it is accepted that the date of sanction of the refund of the security deposit, the demand is still barred by limitation. The notice was required to be served within six months of that date i.e. on or before 3-2-2000, whereas it has only been received by the appellant on 6-2-2000. He tenders an envelope which bears on it the number of the show cause notice and evidently contained it, which shows the Customs House franking dated 4-2-2000, on the same date it was tendered to the General Post Office, Mumbai.

5. The departmental representative contends that the notice deemed to have been served on the date on which it was tendered to the post office and therefore within time. This last contention is clearly not acceptable. The notice is required to be served within six months of (five months from the relevant date) it is not enough if it has merely been given to the post office for transmission to the person concerned [CC, Bombay v. Presto Works - 1987 (28) E.L.T. 469 (Tribunal)]. I have noted the argument of the representative of the appellant that the refund of the security deposit is in no way an act of adjustment of duties after finalisation of provisional assessment, the deposit itself is given even prior to any import. Even assuming in favour of the department that the date of refund of this security deposit is the relevant date from which period of limitation commenced to run, the notice is still barred by limitation, The refund having been sanctioned on 3-8-1999, the notice ought to have been served on the appellant on or before 3-2-2000. The fact that this could not have been done is clear from the fact that it is only that the Customs House on 4-2-2000 tendered the envelope to the post office. The period of limitation had already expired. The demand is thus clearly barred by limitation.