VENKAT PHARMA LTD. Vs. COMMISSIONER OF CUSTOMS (EXPORT)

JUDGEMENT

(1.) THIS appeal filed by M/s Venkat Pharma Ltd, seeks to vacate the Order -in -Original passed by the Commissioner of Customs (Export), Chennai. In the impugned order, the Commissioner has granted extension of time limit for issue of show cause notice for a further period of six months from 29 -3 -2006, in terms of Section 110(2) of the Customs Act, 1962.

(2.) THE facts of the case are that the officers of DRI, Chennai examined a consignment of pharmaceutical preparations presented for export by the appellants under Shipping Bill No. 2184242 dated 26 -10 -05 at CWC, CFS, Madhava -ram, Chennai, on 29 -10 -05. The officers seized the said consignment under a ma -hazar dated 29 -10 -05 on a reasonable belief that the same had been over -valued to avail undue export incentive. The officers drew representative samples from the consignment and subsequently released the same provisionally to the appellants on execution of a bond. Investigation that followed revealed that the appellant had made exports of various pharmaceutical preparations to various African countries during 2001 -2005. The said exports were made through Hyderabad, Chennai, Mumbai and Visakhapatnam ports (Airports). It was ascertained that the FOB value of the goods declared was above Rs. 182 crores involving DEPB credit to the tune of above Rs. 18 crores. On receipt of intelligence on 3 -11 -2005, further searches were also conducted at the premises rented by M/s. Venkat Pharma Ltd. at Hyderabad and incriminating documents were recovered. Several persons had been summoned during investigation and their statements recorded. The Commissioner felt that a further period of six months beyond the six months period of seizure of the export consignment was essential to complete the investigation into the illegal activities in which a large number of people were apprehended to be involved in order to issue show cause notice. Accordingly, notice was issued to the appellants to show cause as to why the time limit for issue of show cause notice should not be extended by a further period of six months as provided under Section 110(2) of the Act. Even though the noticees opposed the proposal on the ground that search and seizure operations were vexatious and that their reputation had suffered irreparable damage owing to the on -going inquiries, the Commissioner, after considering the antecedents of the importer, felt it necessary to extent the time required for issue of show cause notice by six months from the statutory time limit of six months from 29 -3 -2006. Hence the present appeal.

(3.) IN the appeal, the appellants have prayed for setting aside the impugned order on the ground that the same is not legal and was intended to harass them. As the goods involved having been released, the provisions of Section 110(2) of the Customs Act, 1962 were not invocable. In this connection the learned Counsel for the appellants relied on the decision of the Tribunal in the case of Best and Co. v. CC, New Delhi wherein, in an identical case, it was decided that the provisions of Section 110(2) relating to extension of time for issue of show cause notice under Section 124(a) ibid was not invocable after the goods were released. Section 110(2) reads as under: Where any goods are seized under Sub -section (1) and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the [Commissioner of Customs] for a period not exceeding six months.