Court rules that supplementary notices with new allegations are impermissible after adjudication proceedings are concluded, safeguarding importers' rights under pre-2018 Customs Act provisions.
In a significant ruling, the Gujarat High Court has set aside a corrigendum issued by the Customs Department against Messers Vidres India Ceramics Pvt. Ltd. The corrigendum introduced new allegations and evidence after the adjudication proceedings had concluded, which the court found impermissible under the statutory framework of the Customs Act, 1962, as it stood prior to March 29, 2018.
The division bench, comprising Mr. A.S. Supehia and Ms. Vaibhavi D. Nanavati, emphasized that the issuance of a corrigendum proposing new allegations and evidence after the conclusion of adjudication proceedings violates the provisions of Section 28 of the Customs Act, 1962. The court further noted that Explanation-4, introduced by the Finance Act, 2020, clarified that proceedings initiated before March 29, 2018, would be governed by the pre-amended provisions of Section 28.
The case originated when the Directorate of Revenue Intelligence (DRI) served a show cause notice to Vidres India Ceramics Pvt. Ltd., reclassifying their imported goods as "Printing Ink" instead of "Pigments," resulting in higher customs duties. After the adjudication process concluded on July 11, 2016, the Customs Department issued a corrigendum on August 22, 2016, introducing fresh allegations, which the petitioners contested.
The court ruled in favor of Vidres India Ceramics Pvt. Ltd., stating that the corrigendum could not be considered as it attempted to introduce fresh evidence and allegations after the adjudication process had concluded. The judgment highlighted the importance of adhering to statutory timelines and procedures, ensuring fairness and legal certainty for importers.
The ruling serves as a crucial precedent, emphasizing that new evidence or allegations cannot be introduced after the conclusion of adjudication proceedings unless explicitly permitted by statutory provisions. This decision reinforces the legal safeguards for importers, preventing retrospective application of laws without clear legislative intent.
Bottom line:-
Customs Act - Issuance of corrigendum introducing new evidence and allegations after adjudication proceedings are concluded is impermissible under the statutory framework applicable prior to March 29, 2018.
Statutory provision(s): Customs Act, 1962 Sections 28(4), 28(7A), 28(8), and 28(9).
