Legal provisions - CBEC's Customs Manual 2023 - Customs

2. Legal provisions: 2.1 Section 28 of the Customs Act, 1962 provides for recovery of any duty which has not been levied or has been short levied or erroneously refunded or if any interest payable has not been paid, part paid or erroneously refunded provided a notice demanding such duties/interests is issued within the time limit specified in that Section. 2.2 Where the short levy is by reason of collusion or any wilful misstatements or suppression of facts by the importer the period for issuing the demand notice is five years from the relevant date specified in Sub-section (4) of Section 28. 2.3 Other notices are to be issued within two years from the relevant date, as provided under Section 28(1). 2.4 In terms of the provisions of Section 28(8), the proper officer shall, after allowing the concerned person an opportunity of being heard and considering the representation, made by such person, determine the amount of duty or interest from such person limited to the amount specified in the notice. 2.5 In terms of the provisions of Section 28(9) , such determination of duty or interest under section 28(8) is to be completed within a period of six months and one year from the date of the notice in respect of cases falling under section 28(1) and section 28(4) respectively. 2.6 However, any officer senior in the rank to the proper officer may, having regard to the circumstances which prevented the proper officer from determination of the amount of duty or interest within such time period prescribed under section 28(8) , extend the period specified for a further period of six months and one year in respect of cases falling under section 28(1) and section 28(4) respectively. 2.7 Further in terms of the provisions of Section 28BB any inquiry or investigation under this Act, culminating in the issuance of a notice under sub-section (1) or sub-section (4) of section 28 shall be completed by issuing such notice, within a period of two years from the date of initiation of audit, search, seizure or summons, as the case be, or such extended period of further one year. 2.8 In terms of the provisions of Section 110AA , where in pursuance of any proceedings, in accordance with Chapter XIIA or XIII , if an officer of customs has reasons to believe that- (a) any duty has been short-levied, not levied, short-paid or not paid in a case where assessment has already been made; (b) any duty has been erroneously refunded; (c) any drawback has been erroneously allowed; or (d) any interest has been short-levied, not levied, short-paid or not paid, or erroneously refunded, then such officer of customs shall, after causing inquiry, investigation, or as the case may be, audit, transfer the relevant documents, along with a report in writing--, (i) to the proper officer having jurisdiction, as assigned under section 5 in respect of assessment of such duty, or to the officer who allowed such refund or drawback; or (ii) in case of multiple jurisdictions, to an officer of customs to whom such matter is assigned by the Board, in exercise of the powers conferred under section 5, and thereupon, power exercisable under Section 28 , 28AAA or Chapter X, shall be exercised by such proper officer or by an officer to whom the proper officer is subordinate in accordance with sub-section (2) of Section 5.