Deemed conclusion of customs proceedings applies where duty, interest and penalty are paid within the statutory time and conditions are met.

Section 28(5) and Section 28(6) of the Customs Act, 1962 provide a beneficial mechanism for deemed conclusion of proceedings where duty, interest and the prescribed penalty are paid within the stipulated time and the proper officer accepts the payment as full discharge. The text states that this benefit can apply even when the demand arises from alleged collusion, wilful misstatement or suppression of facts. It further states that prior payment of differential duty and subsequent payment of interest and penalty within the permissible period satisfy the statutory conditions, and that a departmental circular or confiscation-based objection cannot restrict the benefit conferred by the statute.

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Issues: Whether the appellants were entitled to deemed conclusion of proceedings under Section 28(5) and Section 28(6) of the Customs Act, 1962 on payment of duty, interest and penalty, even though the demand arose from alleged misdeclaration and the payments were made before and after the show cause notice.

Analysis: The statutory scheme under Section 28(5) and Section 28(6) provides for deemed conclusion of proceedings where duty, interest and the prescribed penalty are paid within the stipulated time after notice and the proper officer determines that the payment is in full. The provision was treated as beneficial in nature and applicable even where the demand arises from collusion, wilful misstatement or suppression of facts. The record showed that the differential duty had been paid before the notice and the remaining amount of interest and penalty was also paid within the permissible period. The attempt to exclude the case on the basis of confiscation and the departmental circular was rejected because the circular could not curtail the statutory benefit available under the enactment, and the conditions of the provision had been satisfied.

Conclusion: The appellants were entitled to the benefit of deemed conclusion of proceedings under Section 28 of the Customs Act, 1962, and the impugned orders were unsustainable.

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