Quashing of Customs Duty Recovery Notice Due to Inordinate Delay.
19 November 2024
Custom Duty >> Tax Laws
In a recent case of Mahindra & Mahindra Ltd., through its Authorised Representative, Ravi Poojary, Mumbai v/s Union of India, Through the Secretary, Department of Revenue, New Delhi & Others, the petitioners challenged a notice issued by the respondent to recover duty foregone under Section 143 of the Customs Act, 1962, due to the non-submission of an Export Obligation Discharge Certificate (EODC) linked to an Advance Authorization issued in 1996. The petitioners argued that the notice was issued after an unreasonable delay of 26 years, and thus, the proceedings should be considered barred by limitation. The respondents countered that no time limit is specified under Section 143 for enforcing such bonds.
The court, while acknowledging that Section 143 does not specify a time limit, noted that the principle of reasonable time must be applied, especially when the Act is silent on limitation. The court referred to the decision of the Supreme Court in Union of India vs. Citi Bank (2022) and the judgment in Coventry Estates Pvt. Ltd. Vs. The Joint Commissioner, CGST, where proceedings were quashed due to significant delays. The court ruled that the 26-year delay in initiating the proceedings was unreasonable, and the impugned notice was quashed.
Section 143, Customs Act - 1962
Section 28, Customs Act - 1962