The Delhi High Court has held that the notices under Section 28(1) and Section 28(4) Of Customs Act 1962 cannot be issued interchangeably.
The bench of Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar has observed that the show cause notice issued under section 28(4) of the Customs Act post the issuance of the SCN under Section 28(1) could be termed a “Supplementary Notice”.
Section 28(1) of the Customs Act states that notice for payment of duties may be issued when any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded
Section 28(4) of the Customs Act states that the notice may be issued in case where any duty has not been levied or not paid or has been short-levied or short-paid or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of collusion; or any wilful mis-statement; or suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter.
The bench opined that notices under Section 28(1) and Section 28(4) operate in different scenarios and even by an exaggerated stretch, cannot possibly be said to be interchangeably issued.
The petitioner/assessee has challenged the Show Cause Notice issued under Section 28(4) of the Customs Act, 1962.
The assessee contended that the SCN dated 01 September 2023 is a subsequent (second) SCN and since a prior SCN, dated 25 July 2023, was already issued under Section 28(1) of the Customs Act, the subsequent SCN is bad in Law and not maintainable particularly since the previously issued SCN dated 25 July 2023 was on a similar factual matrix relating to the importation of similar goods. Such a notice, would in fact, constitute a “change of opinion”.
The court while allowing the petition held that Section 28 of the Customs Act, by its very nature posits, in a given set of facts and circumstances, the issuance of a SCN either under Section 28(1) or under Section 28(4) of the Customs Act and not under both.
The court held that the SCN under section 28(4) of the Customs Act post the issuance of the SCN under Section 28(1) could be termed a “Supplementary Notice”.
The court quashed the SCN issued under Section 28(4) of the Customs Act.
Case Details
Case Title: M/S Ismartu India Pvt. Ltd. Versus UOI
Case No.: W.P.(C) 15199/2023 & CM APPL. 60759/2023 (Stay)
Date: 07.03.2025
Counsel For Petitioner: Tarun Gulati, Sr. Adv.
Counsel For Respondent: Gibran Naushad
