Revenue is rejected by HC Appeal against CAAR’s decision in the Amazon case regarding filing delays

Fact and issue of the case

The appellant has filed the present appeal under Section 28KA of the Customs Act, 1962 (hereafter ‘the Customs Act’) impugning an order dated 08.12.2021 passed by the Customs Authority for Advance Ruling (hereafter ‘CAAR’) in an application filed by the respondent (Application no. CAAR/CUSS/APPL/28 -29/20-21-0/o Commr-CAAR- Mumbai).

The appellant, inter alia, prays as under:-

“a) Allow the present appeal by setting aside the impugned ruling dated 08.12.2021 to a limited extent of conferring notification benefit of Serial No. 20 of Notification No. 57/2017-Customs dated 30.06.2017 to Fire TV sticks;”

At the outset, Mr. Lakshmikumaran, learned counsel appearing for the respondent, stated that the respondent has neither availed the benefit of Notification No.57/2017-Customs dated 30.06.2017 (at Serial No.20) in respect of the Fire TV sticks nor intends to avail of such benefits. He submits that notwithstanding the same, the present appeal is barred by limitation and the delay is beyond the period that can be condoned.

In terms of Section 28KA of the Customs Act, the period stipulated within which the appeal can be filed from a ruling or order passed by the CAAR is sixty (60) days, from the date of communication of such ruling/order. If the court is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period so stipulated, the court may allow a further period of thirty (30) days for filing such appeal.

Section 28KA(1) of the Customs Act is set out below:-

“(1) Any officer authorised by the Board, by notification, or the applicant may file an appeal to the Appellate Authority against any ruling or order passed by the Authority, within sixty days from the date of the communication of such ruling or order in such form and manner as may be prescribed:

PROVIDED that where the High Court is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period so specified, it may allow a further period of thirty days for filing such appeal.”

In terms of the proviso to Section 28KA, the power to extend the time for filing the appeal is confined to a period of thirty days. This is clear from the plain language of the said proviso.

The provisions for seeking advance ruling in respect of certain questions were introduced with a view to provide certainty to applicants in respect of the liability under the Customs Act by recourse to the mechanism for determining questions relating to classification of goods; the principles for valuation of goods; duty structure; applicability of notifications amongst others, in advance. By virtue of Section 28EA of the Customs Act, as introduced by the Finance Act, 2018, the CAAR was constituted for the purpose of giving advance rulings under the Customs Act. Section 28H of the Customs Act sets out the questions in respect of which advance rulings can be sought. An applicant, desirous of obtaining advance rulings, is entitled to make an application setting out the questions on which the advance rulings are sought.

It is apparent from the very nature of the exercise of advance ruling that it was required to be completed in a time-bound manner.

Observation of the court

Section 28KA of the Customs Act was inserted by the Finance Act, 2018, to provide an appeal in respect of any ruling. The Customs Act is a special Act and Chapter-VB of the Customs Act, which contains provisions relating to advance rulings, provides a special scheme for the stated purpose. As noted above, the time for appealing any order/ruling made by the CAAR was restricted to a period of sixty days from the communication of the ruling or order. However, the court can extend the same by a further period of thirty days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the stipulated period of sixty days. The language of Sections 28­I(6) and 28KA of the Customs Act clearly indicates the legislative intent to provide a time-bound mechanism for advance rulings. The legislative intent to provide a firm time-frame for advance rulings is also evident from the fact that the Finance Act 2018 – by virtue of which Section 28KA was inserted in the Customs Act – also amended Section 28-I(6) of the Customs Act and reduced the period available for the CAAR to pronounce its advance ruling from six months to three months.

The period of limitation, as prescribed under Section 28KA of the Customs Act, is not the period as prescribed under the Limitation Act, 1963 (hereafter ‘the Limitation Act’). Thus, in terms of Section 29(2) of the Limitation Act, the provisions of Section 4 to 24 of the said Act shall apply only to the extent not expressly excluded by such special law.

The proviso to Section 28KA(1) of the Customs Act empowers the High Court to extend the period for filing an appeal by a further period of thirty days, subject to the condition that the court is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the specified period of sixty days. It is clear from the plain language that the court’s power to extend time is restricted to a period of thirty days. It would have no power to extend the time for filing the appeal beyond the said period even if it is satisfied that the appellant was prevented by sufficient cause from filing the said appeal within the stipulated period.

It is also well settled that the right to appeal is not an inherent right but one conferred by a statute. It follows that the statute may restrict or truncate the said right.

In Hukum Narain Yadav v. Lalit Narain Mishra: (1974) 2 SCC 133, the Supreme Court had observed as under:-

“.. what we have to see is whether the scheme of the special law, that is in this case the Act, and the nature of the remedy provided therein are such that the Legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If on an examination of the relevant provisions it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our view, even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation.”

In Union of India v. Popular Construction Co.: (2001) 8 SCC 470, the Supreme Court referred to the aforesaid decision in the context of considering the question whether the provisions of Section 5 of the Limitation Act were excluded by virtue of proviso to Section 34(3) of the Arbitration & Conciliation Act, 1996 and answered the said question in the affirmative.

It is apparent from the nature of provisions that an inordinate delay in the advance ruling attaining finality would frustrate the scheme and the object of providing such advance rulings. Thus, keeping in view the express language of the proviso to Section 28KA of the Customs Act as well as the nature and scheme of Chapter V-B of the Customs Act, the jurisdiction of the court to extend the time for filing the appeal, in excess of a period of thirty days over and above the stipulated period of sixty days from the receipt of communication of the ruling or order, is impermissible.

In the present case, this appeal was filed on 14.07.2022. The learned counsel appearing for the appellant submits that the impugned ruling was communicated to the concerned appellant on 22.03.2022. He states that although the copy of the ruling was received by the concerned Commissionerate in Mumbai on 09.12.2021, it was received by the Commissionerate in Delhi much later on 22.03.2022. He states that the Commissionerate of Delhi was also a party to the application filed by the respondent; therefore, for the purpose of limitation, the date of receipt of the impugned ruling must be reckoned as 22.03.2022.

Without going into the aforesaid controversy, it is apparent that even if the appellant’s contention is accepted that the date of communication of the impugned ruling is 22.03.2022 and not 09.12.2021, the present appeal is beyond the period of ninety days from the said date. It was also feebly suggested by the learned counsel appearing for the appellant that the month of June be excluded from the period of limitation since, the period of thirty days, beyond the stipulated period of sixty days for filing the appeal, expired on 20.06.2022. At the material time, this Court was closed for vacations. The said contention is ex facie erroneous. The period, which can be extended in terms of the proviso to Section 28KA(1) of the Customs Act, cannot exceed thirty days. However, even if it is accepted (which this Court does not) that a period beyond thirty days of delay can be condoned on account of it expiring during court vacations, the appellant was required to file an appeal immediately on the re-opening of the Court on 04.07.2022. It is relevant to note that the Registry of the Court had opened prior to that date. Thus, in any view of the matter, this Court has no jurisdiction to entertain an appeal against the ruling of the CAAR as it was filed beyond the further period of thirty days, which can be condoned in case appeal is filed after sixty days of the communication of the said ruling.

In view of the above, the appeal is dismissed as barred by limitation.

Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal.

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