Court holds that adjudication under Sections 28(9) and 28(9A) of Customs Act, 1962 was completed within statutory timeline post cessation of impediments; directs petitioners to avail statutory appellate remedy.
In a significant ruling on September 7, 2026, the Delhi High Court (Division Bench comprising Justice Anil Kshetarpal and Justice Shail Jain) dismissed the writ petition filed by GKEM International Pvt Ltd and others challenging an adjudication order passed by the Commissioner of Customs ICD PPG. The petitioners contended that the adjudication order dated November 29, 2024, imposing differential customs duty of over Rs. 20 crore along with interest and penalties, was beyond the statutory limitation prescribed under Sections 28(9) and 28(9A) of the Customs Act, 1962, and thus void.
The Court, after thorough examination of the facts and relevant statutory provisions, held that the adjudication timeline under Section 28(9) read with Section 28(9A) is computed from the date when impediments to adjudication, such as pending writ petitions or interim orders, cease to exist. The petitioners themselves had relied upon the pendency of a writ petition (W.P.(C) 5756/2021) and the interim protection order dated June 3, 2021, which restrained coercive action by the Customs authorities. This constituted a valid statutory impediment under Section 28(9A)(b) of the Customs Act, effectively suspending the limitation period.
The Court noted that the impugned adjudication order was passed within the permissible one-year period commencing from the dismissal of the writ petition on December 8, 2023. The alleged eight-month extension granted earlier under the first proviso to Section 28(9) was communicated to the petitioners, and the statutory timeline was thus lawfully extended. The Court further clarified that mere administrative transfer of the show cause notice (SCN) to the Call Book under Section 28(9A) does not itself extend limitation; the extension arises from the statutory impediments recognized in the Act.
Addressing the petitioners' contention of non-communication of reasons for the delay, the Court found that since the petitioners themselves had invoked the pendency of the writ petition as a reason for deferment of adjudication, the requirement to communicate the reason for non-determination under Section 28(9A) was substantially satisfied in the facts of the case.
Moreover, the Court emphasized the discretionary nature of writ jurisdiction under Article 226 of the Constitution, highlighting that the petitioners had an efficacious alternative remedy of appeal under the Customs Act. The Court observed that the petitioners did not contest the substantive findings of diversion of duty-free raw materials into the domestic market without fulfilling export obligations and had failed to disclose the cessation of impediments in a timely manner. Such conduct disentitled them from equitable relief.
Consequently, the Court dismissed the petition and directed the petitioners to avail the statutory appellate remedy, clarifying that the appellate authority would be free to consider all grounds raised by the petitioners on merits. The judgment thus reinforces the legal position regarding the computation of limitation in customs adjudication proceedings involving statutory impediments and underscores the importance of adhering to procedural timelines and alternative statutory remedies.
Bottom Line:
The writ petition challenging the adjudication order under Sections 28(9) and 28(9A) of the Customs Act, 1962 was dismissed, holding that the adjudication was completed within the statutory timeline after cessation of impediments, and the petitioners were directed to avail the statutory appellate remedy.
Statutory provision(s):
Customs Act, 1962 Sections 28(4), 28(8), 28(9), 28(9A), 28AA, 28AAA; Notification No. 18/2015-Cus; Foreign Trade Policy provisions.
