Issuance Of Pre-SCN Consultation Is Mandatory Requirement For Issuing SCN Under Customs Act, 1962: Jharkhand High Court

The Jharkhand High Court has held that the issuance of pre-SCN consultation is mandated under proviso to Section 28(1)(a) of the Customs Act, 1962, before issuing the show cause notice.

The bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan has observed that the mandatory pre-SCN consultation, as mandated under proviso to Section 28(1)(a) of the Customs Act, 1962, read with the Pre-Notice Consultation Regulation, 2018, was not complied with while issuing the impugned SCNs; hence, the subsequent Order-in-Original and the 1st Appellate Order were bad in law, being void ab initio and a nullity in the eyes of law.

The petitioner imported steam coal within the meaning of Section 2(23) of the Customs Act, 1962, from outside the territory of India for use in its factory in the State of Jharkhand. The petitioner is the importer of the steam coal within the meaning of Section 2(26).

The petitioner challenged the legality and validity of the order passed by the Commissioner (Appeal), GST, Central Excise & Customs, Bhubaneswar, on the grounds that the entire proceedings are carried out without the pre-show cause notice consultation provided under Section 28(1)(a), which provisions are mandatory and imperative in character and go to the root of the matter.

The petitioner contended that no information for not determining the duty or interest is even communicated to the petitioner as mandated under Section 28(9A). The proviso to Section 28(1)(a) provides for mandatory pre-show cause notice consultation. The department remanded the matter back for denovo adjudication, ignoring that the adjudication orders are barred by limitation under Section 28(1)(a) and the show cause notices are issued without pre-show cause notice consultation as provided under Section 28(9)(a) of the Act, which goes to the root of the matter. Hence, the entire proceeding is void ab initio nullity and vitiated.

The court noted that no pre-notice consultation was extended. The respondent department accepted that while issuing the impugned SCN, the pre-SCN consultation was not done.

The court, while quashing the orders, held that where a statute requires an act to be done in a particular manner, the act has to be done in that manner alone.

Counsel For Petitioner: K.Kurmy

Counsel For Respondent: Amit Kumar

Case Title: M/s. Bihar Foundry & Castings Ltd. Versus Union of India

LL Citation: 2024 LiveLaw (Jha) 37

Case No.: W.P. (T) No. 5161 of 2022

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