GKEM International Pvt Ltd & Ors Vs Commissioner of Customs (Delhi High Court)
Summary: The Delhi High Court considered whether the Order-in-Original dated 29.11.2024 passed against GKEM International Pvt Ltd & Ors. under Section 28 of the Customs Act, 1962 was rendered beyond the statutory period of limitation and, therefore, without jurisdiction. The Petitioners did not challenge the substantive findings concerning diversion of duty-free imported raw materials, non-fulfilment of export obligations or breach of the conditions governing their Advance Authorisation Licences; their challenge was confined to limitation and delayed adjudication.
The dispute arose from duty-free imports of electrolytic copper rods under Advance Authorisations issued under Notification No. 18/2015-Cus dated 01.04.2015. The Customs investigation allegedly found diversion of the imported material into the domestic market in the guise of job work and non-fulfilment of the export obligation. The resulting Show Cause Notice dated 24.06.2022, issued under Section 28(4) read with Section 28AAA, proposed differential customs duty of Rs. 11,11,45,550/- against Petitioner No.1 and Rs. 9,06,17,303/- against Petitioner No.2, cumulatively about Rs. 20.18 crore, besides applicable interest.
The Petitioners contended that the SCN had to be adjudicated within one year under Section 28(9)(b), that the eight-month extension communicated on 12.07.2023 was invalid or insufficient, and that the transfer to the Call Book did not suspend limitation because the prescribed communication and procedural requirements had not been satisfied. The Respondents relied upon Section 28(9A), the interim protection operating in W.P.(C) 5756/2021 and the Petitioners’ own request for deferment. The Court held that the decisive circumstance was the pendency of the writ proceedings and interim order, which squarely attracted Section 28(9A)(b). The Call Book entry of 18.08.2023 was only the administrative manifestation of that statutory circumstance and did not itself create the exclusion from limitation.
