The Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the limitation-barred order, citing unsatisfied conditions under Section 28 of the Customs Act.

The assessee had imported 500 kg of Balsam Tolu ( Oleoresin ) and claimed classification under CTH 13019049 in Bill of Entry No. 4430905 dated 23.08.2011 with the Customs department. The appellant sought benefit under Sr. No. 27 of Notification No. 21/2002-Cus., dated 01.03.2002. Upon examining the goods, the department noted that the notification applied only to ‘Oleo Pine Resin,’ not ‘Oleo resin ( Balsam Tolu ).’ Consequently, a Less Charge notice dated 20.12.2012 was issued under Section 28 of the Customs Act, 1962, questioning the appellant on the differential duty.

Subsequently, a show cause notice under Section 28 was issued on 16.01.2013, leading to adjudication via an original order dated 04.04.2013. The lower adjudicating authority denied the benefit of the 01.03.2002 notification, confirming a differential duty of Rs. 1, 59,860/- along with interest and imposing a penalty of Rs. 25,000/- under Section 112. The appellant appealed this order, which the Commissioner (Appeals) upheld in an order dated 11.06.2014, affirming the demands and dismissing the appeal.

Mr. Durgesh Nadkarni representing the assessee submitted that the classification of the goods adopted by the Department was not in dispute, and the appellant through this appeal is contesting issuance of show cause notice on the ground that there is no element of suppression, fraud etc., and thus, both less charge notice as well as show cause notice are clearly barred by limitation of time as per the provisions of Section 28 ibid.

The bench found that the appeal has made a very specific prayer that the recovery proceedings initiated by the department are barred by limitation of time. In this context, the appellant has submitted that there was no allegation either in the less charge notice or in show cause notice that the appellant had indulged itself in the activities, concerning suppression of facts, fraud etc., with the intent to de-fraud the government revenue.

Further find that the submission made by the appellant is correct that both the notices issued by the Department have not invoked the extended period of limitation for confirmation of the adjudged demands. Insofar as recovery of duty under Section 28 ibid is concerned, the timeline has been prescribed therein for service of notice on the person from whom the proposed duty amount is to be recovered.

Therefore the notices issued beyond the period of one year from such date would be clearly barred by limitation of time. Further, we also find that both the notices (referred supra) did not invoke the extended period of limitation for recovery of the adjudged demands.

The two member bench of the tribunal comprising S.K. Mohanty ( Judicial member ) and M Parthiban ( Technical member ) does  not find any merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands made beyond the normal period of limitation. Therefore, the appeal was allowed in favour of appellant only on the ground of limitation.