Case Note & Summary
The Principal Commissioner of Customs (Import) filed an appeal under Section 130 of the Customs Act, 1962 against an order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai dated 25 September 2020. The respondent, M/s. Signet Chemicals Pvt. Ltd., an importer, had imported 'Neutral Pellets' during March 2012 to February 2015 and classified them under Custom Tariff Heading (CTH) 17029090. A show cause notice was issued alleging that the correct classification was CTH 17019990, and differential duty of Rs.1,44,84,424 was sought to be recovered under Section 28 of the Customs Act with interest and penalty under Section 112(a). The adjudicating authority confirmed the demand and penalty, but CESTAT set aside the demand on the ground of limitation, holding that the extended period of limitation was not invocable as there was no evidence of fraud, collusion, wilful misstatement, or suppression of facts by the importer. The department appealed, proposing two questions of law: whether CESTAT was right in setting aside the demand for extended period despite holding the case on merits in favour of the department, and whether CESTAT passed an unreasoned and non-speaking order. The High Court dismissed the appeal, holding that CESTAT's finding on limitation was a finding of fact based on evidence, and the extended period could not be invoked without proof of suppression. The court also held that CESTAT's order was reasoned and speaking, and no substantial question of law arose.
Headnote
A) Customs Law - Limitation - Extended Period - Section 28 of Customs Act, 1962 - The issue was whether the extended period of limitation could be invoked for recovery of differential duty when the importer had declared the goods under a particular tariff heading. The court held that the extended period requires proof of fraud, collusion, wilful misstatement, or suppression of facts, and mere incorrect classification without such evidence does not justify invocation of the extended period. (Paras 5-10) B) Customs Law - Appeal - Scope of High Court - Section 130 of Customs Act, 1962 - The court considered whether the CESTAT's order was unreasoned and non-speaking. It held that the CESTAT had given cogent reasons for its finding on limitation, and the High Court cannot interfere with findings of fact unless perverse. (Paras 11-12)
Issue of Consideration
Whether CESTAT was correct in setting aside the demand for extended period of limitation despite holding the case on merits in favour of the department, and whether CESTAT passed an unreasoned and non-speaking order.
Final Decision
Appeal dismissed. No substantial question of law arises. CESTAT's order upheld.
Law Points
- Extended period of limitation under Section 28 of Customs Act
- 1962 requires evidence of fraud
- collusion
- wilful misstatement
- or suppression of facts
- mere incorrect classification does not justify invocation of extended period
- CESTAT as final fact-finding authority's findings on limitation are binding unless perverse
- order must be reasoned and speaking.
