M/S Bihar Foundry And Castings LTD Represented Through Its Director Sri Sri Gaurav Budhia vs. Union Of INDIA Through The Secretary Ministry Of Finance Deptt Of Revenue

Facts

M/s. Bihar Foundry & Castings Ltd. (the Petitioner) filed two writ petitions before the High Court of Jharkhand at Ranchi. The petitions challenged orders passed by the Customs authorities concerning the import of Steam Coal. In W.P.(T) No. 5161 of 2022, the Petitioner challenged an Order-in-Appeal dated August 10, 2022, which set aside two Orders-in-Original dated November 19, 2018, and remanded the matter for denovo adjudication. The Petitioner argued that these Orders-in-Original were barred by limitation under Section 28(9)(a) of the Customs Act, 1962, and that the proceedings were carried out without mandatory pre-Show Cause Notice consultation under Section 28(1)(a). In W.P.(T) No. 4340 of 2022, the Petitioner challenged an Order-in-Appeal dated August 1, 2022, and several Final Assessment Orders related to provisional assessments of Bills of Entry, arguing they were barred by limitation and without jurisdiction.

Held

The Court held that both impugned Orders-in-Original dated November 19, 2018, were not sustainable in law. The primary reason was that these orders were passed after the expiry of the mandatory limitation period of six months as provided under Section 28(9)(a) of the Customs Act, 1962. The Court emphasized that the omission of the words 'where it is possible to do so' from Section 28(9) effective March 29, 2018, made the limitation period mandatory and imperative. Furthermore, the Court found that the impugned Show Cause Notices dated April 20, 2018, were issued without the mandatory pre-Show Cause Notice consultation as mandated by the proviso to Section 28(1)(a) of the Customs Act, 1962. The Court noted that the Respondents had not disputed this non-compliance. Citing precedents like Victory Electric Vehicles International Pvt. Ltd. vs. UOI, the Court reiterated that non-compliance with mandatory provisions like pre-notice consultation renders adjudication orders liable to be quashed. Consequently, the Court held that the subsequent Orders-in-Original and the impugned First Appellate Order were bad in law, void ab initio, and a nullity. The writ applications were allowed, quashing the impugned orders.

Key Issues

1. Whether the Orders-in-Original dated November 19, 2018, passed by the Joint Commissioner, Commissionerate of Customs (Preventive), Bhubaneswar, in relation to Bills of Entry No. 260/HC/2011-12 and No. 261/HC/2011-12, are barred by the limitation period of six months prescribed under Section 28(9)(a) of the Customs Act, 1962, particularly after the omission of the words 'where it is possible to do so' effective from March 29, 2018? 2. Whether the Show Cause Notices dated April 20, 2018, issued in respect of the aforementioned Bills of Entry, are bad in law for non-compliance with the mandatory pre-Show Cause Notice consultation requirement under the proviso to Section 28(1)(a) of the Customs Act, 1962. Petitioner's Arguments: The Petitioner contended that the Orders-in-Original were passed beyond the statutory six-month period stipulated in Section 28(9)(a) of the Customs Act, 1962, rendering them void. They further argued that the absence of mandatory pre-Show Cause Notice consultation, as required by the proviso to Section 28(1)(a), vitiated the entire proceedings. The Petitioner relied on the Supreme Court's decision in Competent Authority vs. Barangore Jute Factory and the Delhi High Court's ruling in Victory Electric Vehicles International Pvt. Ltd. vs. UOI. Respondents' Arguments: The judgment does not explicitly record arguments made by the Respondents. However, their counter-affidavits did not dispute the non-compliance with pre-notice consultation.