ORDER
N.K. Bajpai, Member (T)
1. Briefly stated the facts are that a notice of demand under Section 28(1) of Customs Act, 1962 (the Act for short) was issued to the appellant by the Assistant Collector of Customs, Appraising Department, Custom House, Madras on 11th August, 1986 demanding a duty of Rs. 1,23,287.00 on a consignment of interlining material cleared against Bill of Entry No. 44/86 dated 13-2-1986. The appeal turns on the question whether the notice of demand was ‘served’ within the period of six months prescribed in Section 28(1) of the Act. The appellants have stated that they had received the notice on 18th August, 1986 which was after the expiry of the period of six months. The Collector of Customs (Appeals), Madras has recorded the finding that the demand was issued in time and the appellants had not proved with documentary evidence that they had received the demand notice after the expiry of the time limit.
2. Shri B.B. Gujral, the learned counsel for the appellants stated that what Section 28 stipulated was ‘service’ of the notice and not merely its issue. He placed reliance on the judgment of the Orissa High Court in the case of
Shri Nathuram Agarwalla alias Nathulal Agarwalla v. Deputy Collector of Central Excise and Ors. [1982 ECR 896D (Orissa)]
in which it was decided that the requirement of ‘giving’ a notice under Section 79 of the Gold (Control) Act, 1968 for giving a notice within the prescribed time limit before passing an order of adjudication of confiscation or penalty was not complied with unless the notice had been received by the person concerned. Shri Gujral submitted that the same interpretation of law was applicable to a case under Section 28 of the Customs Act, which stipulates that the notice should be ‘served’ within the prescribed period of six months. He also referred to the judgment of Gujarat High Court in the case of
Ambalal Morarji Soni v. Union of India and Ors. [AIR 1972 (Guj.) 126 (V 56 C 22) ]
which also involved interpretation of Section 79 of the Gold (Control) Act, Sections 110(2) and Section 124 (a) of the Customs Act, so far as ‘giving’ of the notice was concerned. Shri Gujral also cited the judgment of the Supreme Court in the case of
F.N. Roy v. Collector of Customs, Calcutta and Ors. [1983 (13) E.L.T. 1296 (SC)]
in which the question was of the receipt of an appeal under the Sea Customs Act, 1878.
3. Shri Gujral made certain other submissions challenging the jurisdiction of the Assistant Collector of Customs, Madras for issuing a notice of demand under Section 28 of the Act for an assessment which was made by the Inland Container Depot, Bangalore and also argued on the question of jurisdiction of the Internal Audit Department of the Customs House to go into these matters. Although he cited numerous decisions on this point, it is not necessary for us to go into those matters. We can decide the appeal on the simple question of interpretation of Section 28(1) of the Act, in so far as the question of serving the notice is concerned. During the hearing Shri Gujral submitted the original notice No. AE/758/86 AC Bangalore dated 11/12-8-1986 issued by the Assistant Collector of Customs, Custom House, Madras in respect of the goods. He explained that this notice was received by the appellants on 18th August, 1986 as was evident from the date of receipt which was shown as on ’18/8′ inside a rubber stamp of the appellant company impressed on the notice. His argument was that the ‘service’ of the notice having been made after the expiry of the period of six months prescribed in Section 28(1) of the Act, the proceedings initiated by the notice were illegal and should be quashed. Shri L.C. Chakravarti, the learned Departmental Representative contested Shri Gujral’s claim that the notice was issued on 12th August, 1986 by inviting attention to the photocopy of the notice which indicated that it had been despatched on 11-8-1986 and submitted that it should ordinarily have reached the appellants the next day. He, therefore, submitted that the demand was not time-barred.
4. We have carefully considered the appeal and the submissions made by both the sides at the hearing. Section 28(1) of the Act uses the words “serve notice on the person chargeable with the duty” within six months. The case law cited before us also supports this view. The appellants have produced the notice received by them which shows the date of receipt to be 18th August, 1986 and the respondents have not been able to produce any evidence to controvert this fact. Thus, the notice was served after the expiry of the prescribed period of six months and the proceedings initiated under the notice cannot, therefore, be sustained. Consequently, the appeal is allowed and the orders of the lower authorities are set aside.
G.P. Agarwal, Member (J)
5. While agreeing with the conclusion recorded by my learned brother, Shri N.K. Bajpai, Technical Member. I would like to add that in the instant case, admittedly, the appellants have their office in Bangalore and the demand notice under Section 20-A(1) of the Customs Act, 1962 was issued on 11-8-1986 under Registered Post and the same was received by them on 18-8-1986. The said demand notice ought to have been served within six months that is to say, on or before 13-8-1986 as required under Section 20-A(1) of the Customs Act, 1962. In the normal course notice of demand issued on 11-8-1986 under Registered Post could not have reached by 13-8-1986 to the appellants as admittedly they are having their office at Bangalore.