Case Note & Summary
The appellant, M/s Gujarat Alkalies & Chemicals Limited, filed an appeal under Section 130 of the Customs Act, 1962 against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai dated 11th March, 2005. The dispute pertained to the recovery of duty on provisionally assessed goods. The appellant had paid duty provisionally, and later a refund order was issued on 31st January, 2001, and a refund cheque was issued on 6th February, 2001. However, the amount was credited into the government treasury on 12th February, 2001. The Department issued a show cause notice under Section 28 of the Customs Act on 9th August, 2001 seeking recovery of duty. The Tribunal held that the relevant date for computing the six-month limitation period under Section 28 was the date of credit into the treasury (12th February, 2001), and therefore the notice issued on 9th August, 2001 was within time. The appellant challenged this finding. The High Court, by consent of parties, modified the questions of law and held that the relevant date for limitation is the date of refund order or refund cheque, not the date of credit into the treasury. Accordingly, the show cause notice issued on 9th August, 2001 was beyond six months from 31st January, 2001 or 6th February, 2001 and thus time barred. The appeal was allowed, and the order of the Tribunal was set aside.
Headnote
A) Customs Law - Limitation - Section 28 Customs Act, 1962 - Recovery of Duty in Provisional Assessment - The issue was whether the relevant date for computing limitation under Section 28 is the date of refund order/cheque or the date of credit into government treasury. The court held that the relevant date is the date of refund order or refund cheque, not the date of credit into treasury. Consequently, the show cause notice issued on 9th August, 2001 was beyond six months from 31st January, 2001 (refund order) or 6th February, 2001 (refund cheque) and hence time barred. (Paras 5-6)
Issue of Consideration
Whether the show cause notice issued under Section 28 of the Customs Act, 1962 on 9th August, 2001 was time barred?
Final Decision
The appeal is allowed. The order of CESTAT dated 11th March, 2005 is set aside. The show cause notice issued on 9th August, 2001 is held to be time barred.
Law Points
- Limitation under Section 28 Customs Act
- 1962
- relevant date for recovery of duty in provisional assessment
- date of refund order or refund cheque
- not date of credit into treasury
