Requirement of a statutory show cause notice: absence of service vitiates a customs duty demand and defeats the appeal.

Requirement of a statutory show cause notice for re-determination of customs classification is central: Section 28(1) requires service of a notice within one year of the relevant date to support a differential duty demand, while the proviso preventing such service only applies where the importer has paid duty and interest and notified the proper officer. The record contained no evidence that any notice was served and the Revenue failed to produce it despite opportunity; absence of service therefore vitiated the demand and the Revenue's appeal was dismissed by CESTAT.

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Issues: Whether a show cause notice under Section 28(1) of the Customs Act was issued and served on the importer for re-determination of classification of the imported operating table, and whether absence of such notice vitiates the demand for differential duty.

Analysis: The issue required examination of the documentary record regarding issuance and service of a notice under Section 28(1) vis-a -vis the Original Authority's invocation of Section 28(2). Section 28(1) mandates serving notice within one year of the relevant date for revision of classification leading to duty demand; Section 28(2) operates to preclude service of such notice only where the person has paid the duty and interest and has informed the proper officer in writing. The Original Authority's order was recorded under Section 28(2), but the Commissioner (Appeals) found that the pre-requisites for Section 28(2) were not satisfied and that no show cause notice was shown on the record. The Revenue failed to produce the asserted notice before the Commissioner (Appeals) or before this Tribunal despite ample opportunity and a lengthy lapse of time. The absence of any evidence of service under Section 28(1), together with the failure to place the notice on record over an extended period, left the sole ground of the Revenue's challenge unestablished.

Conclusion: There was no show cause notice served under Section 28(1); absence of such notice vitiates the demand and the Revenue's appeal is not maintainable and is dismissed.

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