Period Spent In Disposal Of Appeal Before CESTAT Shall Not Be Counted Towards Period Stipulated Under Section 28 (9) Of Customs Act: Delhi High Court

The Delhi High Court has held that the period spent in the disposal of the appeal before the CESTAT, i.e., between the filing and the final order being passed, shall not be counted towards the period stipulated under Section 28 (9) of the Customs Act.

The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the Tribunal has already heard the appeal of the petitioner and the order is reserved.

The petitioner had filed an interim reply to the Show Cause Notice on August 26, 2023, and had also sought an opportunity to cross-examine certain witnesses, which was denied. The petitioner was constrained to approach the Customs Excise and Service Tax Appellate Tribunal (CESTAT) by way of an appeal. The arguments on the appeal have already been concluded, and judgment has been reserved for January 30, 2024.

On the same day after the arguments were reserved, by letter dated January 30, 2024, the petitioner was called upon to file a final reply and also to appear for hearing on February 9, 2024. Since the appeal of the petitioner has already been heard and judgment is reserved, if the respondent concludes the hearing on the Show Cause Notice, it would cause grave prejudice to the petitioner.

The department contended that the Show Cause Notice has to be adjudicated within a statutory period of one year in terms of Section 28 (9) of the Customs Act, 1962. At the request of the petitioner, the time was enlarged by a further period of one year, as stipulated by the proviso to the said section. Since the period is likely to expire, the adjudicating authority has issued notice for concluding the proceedings.

The court directed that the hearing on the show cause notice be deferred until the order is pronounced by the CESTAT. Once the order is pronounced and subject to the order, a period of two weeks will be granted to the petitioner to file a final reply to the Show Cause Notice. The adjudicating authority may proceed further with the conclusion of the show cause notice after giving the petitioner an opportunity for a personal hearing.

Counsel For Petitioner: Chinmaya Seth and A.K. Seth

Counsel For Respondent: Hapreet Singh

Case Title: Anand International And Ors. Versus Commissioner Of Customs

Citation: 2024 LiveLaw (Del) 168

Case No.: W.P.(C) 1815/2024 & CM APPLS. 7598-600/2024

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