TMI Blog2020 (2) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order passed without issuance of any SCN will not sustain. The decision was essentially based on the Delhi Bench of Tribunal decision in the case of M/S SWEES GEMS JEWELLERY, M/S AARADHYA IMPEX VERSUS CGST CE, JAIPUR-I [ 2019 (2) TMI 1375 - CESTAT NEW DELHI] which has been upset by the Hon ble Rajasthan High Court in COMMISSIONER OF CUSTOMS (PREVENTIVE) , JODHPUR VERSUS SWEES GEMS AND JEWELLERY, AARADHYA IMPEX [ 2019 (7) TMI 1433 - RAJASTHAN HIGH COURT] - Rajasthan High Court has held that the CESTAT fell into error in holding that goods had to be released in the circumstances of the case since no notice preceded extension of detention under Proviso to Section 110(2) of the Customs Act, 1962 Thus, the decision of the Tribunal in the case of Gastrade International is no longer a valid precedence on this issue. Appeal dismissed - decided against appellant. - CUSTOMS Appeal No. 11953 of 2019 - A/10522/2020 - Dated:- 24-2-2020 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Ritaj Kacher, Advocate for the Appellant Shri Sharad Airan, Assistant Commissioner (AR) for the Respondent ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containers lying in the premises of Saurashtra - CFS, Mundra, were detained for further investigation. That, by letter dated 20.12.2018 the Inspector, (SIIB Import), lCD, TKD directed the Senior Manager, CONCOR, lCD, TKD, New Delhi to shift the containers covered under bills of entry No.9244913 dated 13 December 2018 filed by the Appellant Company and the said seal should be cut in presence of SIIB officials. 2.2. Thereafter, vide Panchnama dated 21 December 2018, the officers of SIIB Import examined the goods imported vide bill of entry No.9244913 dated 13 December 2018 imported by the Appellant s company. That the Customs officers informed that as inquiry was being conducted by the DRI officers, Ahmedabad Zonal Unit, it may take some more time and accordingly, the goods may be warehoused in terms of Section 49 of the Customs Act, 1962. That on 26 December 2018 the Appellant s Director was issued another summons for appearing on 03 January 2019 before the DRI office. That by letter dated 28 December 2018, the Appellant company requested Deputy/ Assistant Commissioner of Customs, Customs House, Mundra, Mundra Port, for provisional assessment with regard to bill of ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.20 19 the officers had examined the goods at Saurashtra Freight Pvt. Limited, CFS, AP SEZ, Mundra pertaining to bills of entry No.9436001 dated 27 December 2018 which was declared as crystallized glass panel - B- Grade. That these goods were also detained by detention memo dated 03 January 2019 on allegation of suspected undervaluation and mis-declaration. That the Senior Intelligence Officer vide their letter dated 07 January 2019, directed the Appellant s Director to supply original bill of entry along with all supporting documents such as commercial invoice packing list, bill of lading, freight and insurance paid document etc. from 2016 till date other than documents withdrawn under Panchnama dated 09 December 2018 at the earliest. 2.4. Learned Counsel pointed out that, on 08 January 2019 the Appellant s Director went to DRI Ahmedabad office at 15:50 hours to request for NOC for releasing goods detained by DRI Ahmedabad at Mundra and TKD Port. He pointed out that although the summons issued to the Appellant for appearance on 11 January 2019, at around 16:30 hours DRI started taking statement and continued till 7:00 AM and the Appellant was not allowed to sleep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jamnagar, in exercise of powers vested with him under first proviso of Section 110(2) of the Customs Act, 1962 has extended the time limit for issuance of Show Cause Notice for goods. 3 Being aggrieved by the impugned order dated 13 May 2019, the Appellant preferred the present appeal mainly on the following grounds :- (a) That the impugned order/communication has been passed without issuing the Show cause notice and giving opportunity to be heard to the appellant before extending the time limit for issuance of Show cause notice under the provisions of Section 110(2) of the Customs Act, 1962; (b) That even the amendment to the provisions of Section 110(2) of the Customs Act, 1962 by Finance Act, 2018 will not alter the situation as for grant of personal hearing the extension of Show cause notice; (c) That the amendment to the provisions of Section 110(2) of the Customs Act, 1962 by Finance Act, 2018 will not alter the situation as for grant of personal hearing before extending the time limit for issuance of Show cause notice; (d) That the Commissioner has totally ignored the law laid down by the Hon ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Courts and Supreme Court. It is seen that those decisions of High Courts and Supreme Court which have been relied on by the Tribunal in the case Swees Gems and Jewellery pertains to unamended Section 110(2). We find that the said decision of Tribunal in the case of Swees Gems and Jewellery has been set-aside by the Hon ble Rajasthan High Court with following observations:- 11 . Before proceeding to analyze the parties rival submissions, it would be useful to extract the pre-amended law, and the provision of Section 110(2) after the amendment. They are set out, in a tabular manner, as follows: Provisions prior to amendment of proviso to Section 110(2) Provisions subsequent to amendment of proviso to Section 110(2) (2) Where any goods are seized under sub-section (1) and no notice in respect sub-section (1) and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. Provided that the aforesaid period of six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the power under the proviso could be exercised, for sufficient cause . This was the subject of interpretation in I.J. Rao (supra). The Supreme Court, held, in that decision, that: There is no doubt that the words on sufficient cause being shown in the proviso to Section 110(2) of the Act indicates that the Collector of Customs must apply his mind to the point whether a case for extending the period of six months is made out. What is envisaged is an objective consideration of the case and a decision to be rendered after considering the material placed before him to justify the request for extension. The Customs Officer concerned who seeks the extension must show good reason for seeking the extension, and in this behalf he would probably want to establish that the investigation is not complete and it cannot yet be said whether a final order confiscating the goods should be made or not. As more time is required for investigation, he applies for extension of time. The Collector must be satisfied that the investigation is being pursued seriously and that there is need for more time for taking it to its conclusion. The question is whether the person claiming resto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen to him to question whether the stage of the investigation, and the need for further investigation, call for an extension of time. It is impossible to conceive that a person from whose possession the goods have been seized with a view to confiscation should be entitled to know and to monitor, how the investigation against him is proceeding, the material collected against him at that stage, and what is the utility of pursuing the investigation further. These are matters of a confidential nature, knowledge of which such person is entitled to only upon the investigation being completed and a decision being taken to issue notice to show cause why the goods should not be confiscated. There can be no right in any person to be informed midway, during an investigation, of the material collected in the case against him. Consequently, while notice may be necessary to such person to show why time should not be extended he is not entitled to information as to the investigation which is in process. In such circumstances, the right of a person, from whose possession the goods have been seized, to notice of the proposed extension must be conceded, but the opportunity open to him on such notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 14 . The reasoning of the Supreme Court was primarily based on the fact that issuance of a show cause notice (i.e. under Section 124) is part of a quasi-judicial or judicial act and consequently, the delay in its issue can at times, be prejudicial to the interests of the party or importer, who has an interest in the goods. The observations of the Court are pointed, with respect to the nature of the goods and the information about their condition, which the party likely to be affected might possess. This Court is also alive to the fact that Section 110 confers a general power of detention of goods: thus, all classes of articles, including perishables, such as foodstuffs, pharmaceuticals and other goods having limited shelf life can be implicated. Yet, the Court has to also be alive to the fact that I.J. Rao (supra) was premised upon the phraseology of Section 110(2), and the power of extension being conditioned on sufficient cause being shown which was the subject matter of the Court s discussion. Now, the amendment has done away with that expression; the power to extend (the period of detention) after amendment states that, if the Commissioner of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such security and conditions as the adjudicating authority may require. 18 . These developments, in the opinion of the Court, resulted in a complete change of law, on the aspect. Section 110(2) too has not remained unaffected; a second proviso has been added, which states that :- Provided further that where any order for provisional release of the seized goods has been passed under Section 110A, the specified period of six months shall not apply . 19 . The effect of these amendments, is that the rigour of unamended Section 110(2) has been softened. Now, a person, whose goods are detained, can claim provisional release. At the time when I.J. Rao was decided, that facility was not available. Seen in the context of these facts, it is apparent that a textual reading of Section 110(2) would lead one to conclude that no separate notice is necessary, before extending the period of limitation by a further six months (for issuance of show cause notice); the authority has to record reasons in writing, which of course, should be based on materials and inform the concerned party about the extension before the expiry of the first period of ..... 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