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Cus - In computing period of limitation contemplated u/s 110(2), date on which goods were seized is to be excluded - Petition dismissed: HC

By TIOL News Service

NEW DELHI, OCT 14, 2015: GOODS were seized by the Customs authorities on 03.03.2015.

By an order dated 02.09.2015, the Commissioner of Customs has extended the period for issuance of show-cause notice for confiscation of the goods under proviso to Section 110(2) of the Customs Act, 1962.

The petitioner challenges this order dated 02.09.2015.

The ground is that under proviso to Section 110(2), the power can be exercised by the Commissioner prior to the expiry of initial period of six months stipulated under section 110(2) and since in this case the said power is not exercised within the stipulated period of six months, the seized goods are liable to be released.

It is contended that the goods were seized on 03.03.2015 and the stipulated period would expire on 02.09.2015. By the impugned order dated 02.09.2015, the period of six months has been extended from 04.09.2015. It is submitted that since the period expired on 02.09.2015 and the extension is from 04.09.2015, the period has lapsed and the goods are liable to be released. [I. J. Rao,   Asstt. Collector of Customs & Others versus Bibhuti Bhushan Bagh and Another: (1989) 3 SCC 202 refers.]

The counsel for the respondent department submitted that under Section 9 of the General Clauses Act, 1897, the date on which the goods were confiscated i.e., on 03.03.2015 is to be excluded for the purposes of computation of the period of six months and as such, the period would have commenced on 04.03.2015 and would have ended with the end of 03.09.2015 and the order of the Commissioner passed on 02.09.2015, thus rightly grants an extension of six months commencing from 04.09.2015. Alternatively, it is contended that since the order impugned in the petition was passed on 02.09.2015, i.e., even prior to the period as per the calculation of the petitioner, the said period under proviso to Section 110 (2) would extend for a further period of six months from the expiry of the initial period of six months and the mere mentioning of the date 04.09.2015 in the impugned order would be of no consequence. [ M/s. Econ Antri Limited v. M/s. Rom Industries Ltd. & Anr.: (2014) 11 SCC 769 relied upon]

The High Court, after considering the submissions,distinguished the decision cited by the petitioner and observed -

+ The proviso to Section 110(2) contemplates an extension of the initial period of six months and does not contemplate renewal or commencement of a fresh period of six months. Since it is an extension, that is contemplated, the same would commence from the expiry of the initial period. The extended period starts automatically with the expiry of the initial period unlike in a case of renewal, which may be from an entirely different date.

+ In this backdrop, even if the contention were to be accepted that the period ended on 02.09.2015, the same would end with the end of 02.09.2015 i.e. on the midnight of 02.09.2015 and the extension of six months would have commenced with the beginning of 03.09.2015, i.e., 00 hours on 03.09.2015. The impugned order was passed on 02.09.2015, within the initial period of six months and as such, is in consonance with Section 110(2) of the Act.

+ In terms of the law as laid down by the Supreme Court in Econ Antri Ltd. , in computing the period of limitation contemplated under Section 110(2), the date on which the goods were seized is to be excluded. In the present case, the initial period of six months for computing the period of limitation as stipulated in Section 110(2) would commence on 04.03.2015 and would end on 03.09.2015. Thus, the order dated 02.09.2015 extending the period from 04.09.2015 cannot be faulted. The initial six months period would have ended on the midnight intervening 3rd and 4th September, 2015 and immediately thereon, the extended period in terms of the order dated 02.09.2015 would commence with the commencement of 04.09.2015.

+ We are of the view that mere mentioning 'for a period of six months from 04.09.2015' would not invalidate the extension. The order records that the period has been extended by a period of six months, and since the extension would come into effect for six months on the expiry of the initial period, the mentioning of the date would not have any consequence in so far as the period of six months is concerned.

Holding that there is no infirmity in the order impugned, the writ petition was dismissed.

(See 2015-TIOL-2386-HC-DEL-CUS )


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