Page 147 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] SUPER OIL COMPANY v. UNION OF INDIA 537

[Order per : Girish Agnihotri, J.]. - The petitioner, a Partnership Firm, is
engaged in the business of importing, inter alia, Pressed Distillate Oil (for short
‘PDO’) with its office situated at Ludhiana. The petitioner filed a Bill of Entry on
30-6-2011 importing one consignment of “PDO”, which was detained by the Cus-
toms Authorities, doubting the description of the goods as “PDO”. Samples in
terms of Section 144 of the Customs Act, 1962 (in short ‘the 1962 Act’) were
drawn and sent for testing to two (2) different laboratories, namely, Punjab Tent
House and CRCL, New Delhi. Upon receipt of test report dated 14-7-2011 (An-
nexure P-1) from the Punjab Tent House confirming the material as PDO, the
Proper Officer provisionally assessed the Bill of Entry and the goods were
cleared after payment of duty based on such provisional assessment. Subse-
quently, a report dated 24-8-2011 (Annexure P-2) was received from the CRCL,
New Delhi, with the observation that there was no specification of “PDO” avail-
able with them.
2. The Directorate of Revenue Intelligence (in short ‘DRI’), thereafter on
28-1-2013, searched the residential and business premises of the petitioner and
drew samples of the said goods on 12-2-2013 for testing by CRCL, New Delhi,
which vide its subsequent report dated 14-3-2013 reported that the samples had
the characteristics of “Base Oil”. The Customs Authorities based on the said re-
port issued the impugned show cause notice dated 7-2-2014 (Annexure P-6) for
misdeclaration of value and description of goods, inviting payment of duty on
the value of Base Oil and penalty under Section 112 of the 1962 Act, thereby final-
izing the assessment.
3. Counsel for the petitioner has raised two fold arguments :-
(i) that after the clearance of goods from the customs area, no authority
has the power to draw fresh samples (as drawn from the factory
premises of the petitioner) in view of the provisions of Section 144
of the 1962 Act, which ordains that the samples can only be drawn
at the time of Entry of Goods or clearance of goods or while goods
passed through the customs area;
(ii) that the impugned show cause notice was issued on 7-2-2014 (P-6)
and till date, concededly, no order of adjudication has been passed.
It is contended that this issue stands covered by the judgment of
this Hon’ble Court in case of M/s. Harkaran Dass Vedpal v. Union of
India and Others, 2019-TIOL-1591-HC-P&H-CUS = 2019 (368) E.L.T.
546 (P&H), whereby it has been held that the Customs Authorities
cannot adjudicate a show cause notice beyond a period of five (5)
years from the date of show cause notice and in case of the show
cause notice pending on 29-3-2018, the Proper Officer in view of the
amended provisions was bound to pass an order within one year,
i.e. on or before 28-3-2019, unless the period had been extended in
terms of Section 28(9) or Section 9A of the 1962 Act, concededly, no
such extension has been made. Hence, it is claimed that show cause
notice would lapse.
4. We have considered the rival arguments and the provisions of law
and find that the present petition has to succeed on both the counts;
(i) that the DRI or the Customs Authorities, after the imported goods
had been cleared from the customs area, had no authority to draw
fresh samples on 28-1-2013 of such cleared imported goods from the
EXCISE LAW TIMES  15th May 2020  147