Supreme Court Issues Notice On Challenge To Delhi HC View That Customs Need Not Communicate Adjudication Time Extension

The Supreme Court recently (February 6) issued notice in a challenge to a Delhi High Court ruling that held that customs authorities were not required to communicate an extension granted for completing adjudication proceedings and directed that the matter be heard along with a pending appeal.

A bench comprising Justices P.S. Narasimha and Alok Aradhe issued notice in the special leave petition filed by Pranij Heights India Pvt. Ltd. and directed that it be listed along with the pending SLP in Shri Ram Agro Chemicals Pvt. that raises a similar question.

The appeal stems from a judgment of the Delhi High Court, which chose not to interfere with adjudication proceedings initiated under the Customs Act against the importer.

The case before the High Court arose after Pranij Heights challenged a show cause notice dated July 7, 2023. The notice proposed denial of preferential duty benefits claimed under the ASEAN–India Free Trade Agreement on imports of aluminium foil.

According to the importer, the adjudication could not continue as it had become time-barred under Section 28(9) of the Customs Act, 1962. That provision lays down the time limit within which customs authorities must decide duty demands raised through a show cause notice, while permitting a limited extension if the adjudicating authority is unable to complete the process within the prescribed period.

The Customs Department, however, presented a different picture. It placed on record a series of notices issued to the importer, calling for replies and attendance at personal hearings. It also relied on a note-sheet to show that a one-year extension under Section 28(9) had been granted by the competent authority.

After considering the rival submissions, the High Court rejected the importer's challenge. It held that although extensions granted under Section 28(9) ought to be intimated to the noticee as a matter of good practice, the statute itself does not require such communication.

To underline this distinction, the court compared the provision with Section 110(2) of the Customs Act, which deals with seizure of goods and expressly mandates that the person concerned be informed if the time for issuing a notice is extended. In contrast, the court said, no such obligation is written into the scheme governing adjudication of show cause notices.

The High Court also took note of the petitioner's conduct during the proceedings. It observed that despite repeated opportunities, the importer did not file any reply on merits and did not contest the allegations regarding the authenticity of the Certificates of Origin relied upon to claim preferential duty benefits.

In view of these findings, the writ petition was dismissed. The court, however, granted liberty to the importer to pursue the statutory appeal against the adjudication order.

The Supreme Court of India has since directed that the challenge be listed along with the SLP challenging the Punjab and Haryana High Court order. 

For Petitioner: Advocates Prem Ranjan Kumar, Awanish Sinha, AOR

For Respondents: None