Analyzing the Bombay High Court’s Customs Ruling

The Bombay High Court has annulled a notice that was issued under the Customs Act concerning the recovery of duties that were waived back in 1996, deeming the 26-year delay in issuing the notice as excessive and unjustifiable.

This notice, which was directed at Mahindra and Mahindra Ltd by the Office of Commissioner of Customs (Export) on December 15, 2022, aimed to reclaim duties under Section 143 of the Customs Act. The court emphasized that while the Customs Act does not explicitly outline a time frame for such recoveries, it is essential that any proceedings be initiated within a timeframe that can be considered reasonable.

In this case, Mahindra and Mahindra Ltd contended that the notice was related to the failure to submit the Export Obligation Discharge Certificate, which dates back to September 23, 1996.

The issuance of the notice nearly 26 years after the alleged non-compliance raised significant concerns about the timeliness of the action.

The legal representatives for the company argued that the proceedings were “hopelessly barred by delay,” highlighting that even in the absence of a specific limitation period in the Customs Act, it is imperative that actions be taken within a reasonable duration to ensure fairness and justice.

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