Page 37 - ELT_3rd_1st May 2020_Vol 372_Part

2020 ] DEMAND AND RECOVERY — UNDER CUSTOMS ACT, 1962 A95

(2) Every such provisional attachment shall cease to have effect after the ex-
piry of a period of six months from the date of the order made under sub-
section (1) :
Provided that the Principal Chief Commissioner of Customs or Chief Com-
missioner of Customs may, for reasons to be recorded in writing, extend the
aforesaid period by such further period or periods as he thinks fit, so, howev-
er, that the total period of extension shall not in any case exceed two years :
Provided further that where an application for settlement of case under Sec-
tion 127B is made to the Settlement Commission, the period commencing
from the date on which such application is made and ending with the date on
which an order under sub-section (1) of Section 127C is made shall be exclud-
ed from the period specified in the preceding proviso.
Case Laws
The Hon’ble High Court of Bombay in the case of Teksons Ltd. v. Assistant
Collector of Customs - reported in 2004 (165) E.L.T. 17 (Bom.) held that in the ab-
sence of any material on record to disclose that the show cause notice dated 13th
April, 1988 was in fact served upon the petitioners within the period specified
under Section 28(1) of the Customs Act, 1962, the Learned Advocate for the peti-
tioners is justified in contending that the demand is barred by the law of limita-
tion. Undisputedly, there is no allegation of any collusion or misstatement or
suppression of facts by the petitioners. Hence the period of 5 years was not avail-
able to the department. The order of 13th April, 1988 is beyond the period of 5
years from the relevant date of export. Undoubtedly, the order dated 13-4-1988
refers to the issuance of show cause notice dated 13th October, 1980 in relation to
the bill of entry dated 17th and 23rd August, 1980. But as already held above,
there is no material to show that the said notice of 13-10-1980 was served upon
the petitioners. Considering the same and in the absence of any material on rec-
ord to disclose that the show cause notice was served upon the petitioners as per
the provisions of Section 28(1) of the Customs Act, 1962, the demand is beyond
the period of limitation prescribed under the law and, therefore, even the ques-
tion of remanding the matter to pass an appropriate speaking order after giving
opportunity to the party of being heard in the matter does not arise in the case in
hand. (Para-10).
The Hon’ble High Court of Gujarat in the case of Commissioner v. Shah
Alloys Ltd. - reported in 2011 (269) E.L.T. 323 (Guj.) was held that the extended
period for limitation of demand was not invocable in the case where the assessee
had imported furnace oil under EPCG licences on the basis of licences issued by
DGFT, which in turn were given by the authority based on Chartered Engineers
Certificate stating requirement of furnace oil in captive power plant for produc-
tion of electricity to manufacture export goods. The Court further observed that
since suppression or wilful misstatement was alleged at stage of issuance of li-
cences which is prior to import and as person applying for licence cannot be held
as importer, hence any suppression etc. prior to importation not fell within ambit
of proviso to Section 28(1) of Customs Act, 1962. The same was approved by Su-
preme Court reported in 2011 (270) E.L.T. A38 (S.C.).
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