Customs Dept Can't Exceed Limitation Period for Issuance of SCN Due to Petitioner's Non-Appearance for Appraisement: Delhi High Court

Customs Dept Can't Exceed Limitation Period for Issuance of SCN Due to Petitioner's Non-Appearance for Appraisement: Delhi High Court

Introduction

The Delhi High Court has held that the Customs Department cannot exceed the limitation period prescribed for issuance of show cause notice after detention of goods, merely on the ground that the person from whom goods were seized did not appear for appraisement. The Court observed that non-appearance for appraisement does not stop the limitation for the issuance of the show cause notice in the Customs Act.

Factual Background

The petitioner's gold chain was detained by the Customs Department on 13th March 2024, upon his return to the country from Bangkok. The petitioner claimed that the article qualifies as his "personal effect" and in any case, the detention was vitiated due to non-issuance of show cause notice till date.

Procedural Background

The Department contended that the petitioner did not appear for appraisement of the detained gold chain, and hence, the show cause notice could not be issued. The petitioner approached the Delhi High Court challenging the detention of his gold chain.

Issues

1. Limitation Period: Whether the Customs Department can exceed the limitation period prescribed for issuance of show cause notice after detention of goods.

2. Non-Appearance for Appraisement: Whether non-appearance for appraisement is a valid ground for withholding the issuance of a show cause notice.

Reasoning & Analysis

The Court relied on its earlier judgment in Dhiren v. Commissioner of Customs (2025), where the non-appearance for appraisement as an explanation for delay was rejected. The division bench of Justices Prathiba M. Singh and Shail Jain observed that non-appearance for appraisement is not a ground for withholding the issuance of a show cause notice in terms of Section 110 of the Customs Act, 1962.

Decision

The Court set aside the detention of the petitioner's gold chain, holding that non-issuance of the show cause notice within the limitation period is a sufficient ground to release the goods.

Implications

The Delhi High Court's decision clarifies the law on the limitation period for issuance of show cause notices after detention of goods. The ruling ensures that the Customs Department cannot delay the issuance of show cause notices beyond the prescribed limitation period, even if the person from whom goods were seized does not appear for appraisement.

Conclusion

The Court's judgment in this case emphasizes the importance of adhering to the limitation period prescribed under the Customs Act. The decision is a significant relief for individuals and businesses who may face similar situations in the future.

In this case the petitioner was represented by Mr. Lalltaksh Joshi and Ms. Ananya Sanjiv Saraogi, Advocates. Meanwhile the respondent was represented by Mr. Avijit Dikshit, Advocate.