LexABAN LOYD CHILES OFFSHORE LIMITED AND ORS. versus COMMISSIONER OF CUSTOMS, MAHARASHTRA
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A ABAN LOYD CHILES OFFSHORE LIMITED AND ORS. v. COMMISSIONER OF CUSTOMS, MAHARASHTRA AUGUST 7, 2006 B [ASHOK BHAN AND MARKANDEY KATJU JJ.] Customs Act' 1962. Section 28---Proviso-lnvoking of-ExLension of the period of limitation- C Held, assessee has lo put lo notice poinling out :,pecifically 1he instances lo wilful misstalement and suppression of facts. Appellants were contractors acting for and behalf of ONGC for the exploration and exploitation of oil and natural gas, etc. The contractors D carried on offshore operations with their oil rigs as per the directions of ONGC. Between 1970 and 1987, ONGC carried on its operations from its facilities at 12, Victoria docks. Having been permitted by the Customs department goods were allowed to be transferred to the rigs and back to the shore without payment of the customs duty. In 1987, ONGC shifted its offshore operations to Nhava base. Under separate contracts entered E into with ONGC, the appellants continued to carry out the offshore operations. Three show cause notices were issued to the appellants proposing to recover the escaped customs duty and levy penalty for unauthorised loading and unloadings, storage and return of the goods removed from Nhava .base. Further extended period of limitation in terms F of proviso to section 28 of the customs Act 1956 was invoked. Following it, further show cause notices were issued by which appellants' ship stores were sought to be confiscated and the customs duty and penalty sought G to be levied. Commissioner of Customs confirmed the demand. Tribunal accepted the appeals impugning the order by which goods were being confiscated but appeals against other orders were dismissed. It was contended by the appellant that demand of the duty and the penalty was not justified as the department was aware all through that Nhava base was being used by the ONGC for supply and receipt of the goods. That apart, the show cause notices did not contain any averment specifically pointing out which of the various omissions and commissions Ii 290 ... ABAN LOYD CHILES OFFSHORE LID. 1·. COMMR. OF CUSTOMS. MAHARASHTRA 29 J had been committed to invoke the extended period of limitation. In other A words, no act of wilful misstatement or suppression of facts on the part of the appellant was averred. Appellants expressed their preparedness to pay the duty for the last six months immediately prior to the issuance of the show cause notice. Respondent, on the other hand, contended that though there is no B averment in the show cause notice that the appellants were guilty of either collusion or wilful misstatement or wilful suppression of facts but if show cause notice is read as a whole it clearly points out that the appellants were guilty of wilful suppression of facts. Allowing the appeals in part, the court c HELD: 1.1. The proviso to st.ction 28 of customs Act can be invoked where the payment of duty has escaped by reason of collu~ion or any wilful misstatement or suppression of facts. The expression 'misstatement or suppression of facts' being qualified by the word 'wilful', it requires that D there has to be an intention on the part of the assessee to evade the duty. 1298-E] 1.2. In order to attract the proviso to Section 28 extending the period of limitation from six months to five years-the show cause notice must put the assessee to notice, the various omissions or commissions as stated E in the proviso to have been committed which in the present case the show cause noticed lacked. Moreover, appellants were working on behalf of the ONGC and as per its directions and the ONGC had intimated the department of its operations, the department thus being aware of all these facts it was not entitled to invoke the proviso to extend the period of limitation. 1299-E-F; 300-A-B] F Collector of Central excise v. H.MM Limited, 11995] 3 322, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3584-3588 G of 2001. From the Final Order No. Cl/92-96/WZB/2001 dated 15. 1.200 I of the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai in Appeal Nos. C-1113 to C-1115-R/97-Bom and Appeal Nos. Cl 394 and 395-V/98-Bom. H 292 SUPREME COURT REPORTS [2006) SUPP. 4 S.C.R. A Joseph Vellapally, S. Ganesh, Mahesh Agarwal, Rishi Agrawala, Raghvesh Singh, Amar Dave. D.K. Dass and E.C. Agrawala for the Appellants. M.M. Paikaday, T.V. Ratnam, Kiran Bhardwaj and B.K
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