Under Section 28(9A), customs adjudication limitation runs from cessation of a stay-related impediment.

The Petitioners imported duty-free raw materials under Advance Authorisation Licences issued by the DGFT and were required to manufacture and export finished goods within the prescribed Export Obligation Period.

Customs alleged that the Petitioners diverted the imported materials into the domestic market through purported job-work arrangements, without fulfilling the export obligation, in breach of the actual-user condition under Notification No. 18/2015-Cus.

A Show Cause Notice dated 24 June 2022 was issued under Sections 28(4) and 28AAA of the Customs Act, 1962, proposing recovery of approximately ₹20.18 crore in differential customs duty, along with interest.

The Petitioners had earlier approached the High Court seeking extension of the Export Obligation Period and permission to procure copper from the domestic market. The High Court dismissed the proceedings on 8 December 2023 after the DGFT rejected their representations.

During the adjudication of the SCN, an eight-month extension was granted under the first proviso to Section 28(9), and the proceedings were subsequently transferred to the Call Book after the Petitioners themselves sought deferment pending the earlier writ petition and relied upon the interim order restraining coercive action.

After dismissal of the earlier writ petition, the proceedings were revived and culminated in an Order-in-Original dated 29 November 2024 confirming the duty demand, with interest under Sections 28(4), 28AA and 28AAA.

The Court applied Section 28(9)(b) of the Customs Act, 1962, which requires determination of duty or interest within one year from the date of notice in cases falling under Section 28(4), subject to the statutory extension under the first proviso; the second proviso provides that proceedings are deemed concluded if determination is not made within the permissible period.

Section 28(9A) operates notwithstanding Section 28(9) where determination is prevented by specified circumstances, including a pending appeal or interim order of the Appellate Tribunal, High Court or Supreme Court; in such cases, the statutory period begins when the relevant circumstance ceases to exist, subject to informing the person concerned of the reason for non-determination.

The Court distinguished Vos Technologies Pvt. Ltd. v. Principal Additional Director General, 2024 SCC OnLine Del 8756, because it concerned pre-2018 SCNs and prolonged, unexplained Call Book pendency under the unamended statutory regime.

The Court also applied the principles that writ jurisdiction under Article 226 is discretionary and ordinarily will not be exercised where an efficacious alternative remedy exists, and that a party cannot approbate and reprobate by relying on a circumstance to defer adjudication and later relying on the resulting delay to seek equitable relief.

The Court considered, but did not find applicable, the Supreme Court’s interim direction in Union of India v. GMR Airport Infrastructure Ltd., SLP(C) No. 5392/2025.

The SCN was issued under Section 28(4); therefore, the ordinary period under Section 28(9)(b) was one year from 24 June 2022, subject to extension.

However, the Petitioners themselves sought deferment of adjudication on the basis of the pending writ petition and the interim order restraining coercive recovery, and expressly reserved the right to file a substantive reply after disposal of that petition.

The Court held that this situation fell within Section 28(9A)(b), since the interim order and the issues pending in the earlier writ petition were directly relevant to the Petitioners’ liability under the Advance Authorisations.

The Call Book transfer was treated only as an administrative consequence of the statutory circumstance; it was not itself the source of the limitation exclusion.

Although Section 28(9A) ordinarily requires the proper officer to inform the noticee of the reason for non-determination, that requirement was substantially satisfied because the Petitioners themselves had identified and relied upon the very circumstance preventing adjudication.

The relevant circumstance ceased when the earlier writ petition was dismissed on 8 December 2023. The statutory period consequently commenced from that date, and the OIO dated 29 November 2024 was passed within the applicable one-year period.

Independently, the Court declined to exercise writ jurisdiction because the Petitioners had an efficacious statutory appeal and had not challenged the substantive findings regarding diversion of goods and non-fulfilment of export obligations.

Their failure to inform the adjudicating authority of the dismissal of the earlier writ petition, after having sought deferment on its pendency, further disentitled them to equitable relief.

The pendency of the earlier writ petition and the interim order constituted a circumstance under Section 28(9A)(b), and the limitation period began only upon cessation of that circumstance on 8 December 2023.

The challenge to the SCN and OIO was therefore rejected.

The writ petition and pending application were dismissed, while the Petitioners were granted liberty to pursue the statutory appellate remedy and raise all available grounds before the competent appellate authority; the Court clarified that its observations would not prejudice consideration of those contentions on merits.