Custom duty

[Jasbir Uppal]

Dear Professional brothers & Sisters

My client has import the goods during the financial year 2018-19 from out of Indian Territory, after verification of goods by the custom authority as assessed the duty my client has paid (IGST) @12% and custom authority released the goods. Now after more the six year custom authority issued a notice to my client on the grounds that you have liable to pay duty @ 18%. After inspection of the file of the department there is no any sample of goods attested in the file. Can after such a long time can department asked to pay the difference of duty when the sample of goods also not on file.

With regards

J.S. Uppal

[POOJA AGARWAL]

Dear Sir, 

Please clarify whether DRC-01 or DRC-01A has been issued ? The last date to issue DRC 01u/s 73 for FY 2018-19 is already expired, now the department can propose recovery only u/s 74, which is applicable in cases of fraud, suppression etc. In your case apparently, section 74 cannot be invoked unless there is some positive evidence of fraud suppression etc.

[POOJA AGARWAL]

Sorry didn't notice the words custom authority in your above query. The time limit to issue notice under Customs Act is 2 years for cases not involving fraud etc. and 5 year in cases where duty is not paid on account of fraud, suppression etc. The relevant date should be date of Out of Charge Order/date of payment of duty in you case.

[Jasbir Uppal]

Thanks for reply.

But my query is that my client has paid custom duty as assessed by the custom authorities after verification of goods at sea port and my client has deposited duty accordingly and goods were released by custom authority.

Now custom authority is asking to pay custom duty (IGST) at the rate 18% instead of 12%.

Now there is no such evidence on record to assess duty at the rate 18%.

Kindly give opinion and if possible with case laws.

Thanks & Regards

J S Uppal

[PAWAN KUMAR]

dear sir,

please check whether IGST rate amended by any of the notification for the goods imported. The notification might have retrospective effect and cover the assessment of custom duty.

[Jasbir Uppal]

Respected brother. No change in rate of tax on product which we import. 

With warm regards 

J. S. Uppal 

[Shilpi Jain]

If there has been no suppression or fraud then the notice should be contested on being issued after the statutory time limit.

If your goods match the description mentioned in the BoE and HSN is proper, no misdeclaration, this stand can be taken.

[Jasbir Uppal]

Respected Shipi Ji 

In my case issue is only different of tax we pay custom duty @12% as assed by the proper officer, but custom department issue SCN and asked for pay difference of duty (18%-12%=6%) with interest there has been no suppression or fraud ligation in this case

But I thinks as per  the section 28 (9) of Custom  act the Limitation for determined the duty or interest or penalty by the proper officer within 6 months from the date of notice in respect of case falling under section 28(1)(a) and within 1 year from the date of notice in respect of case falling under section 28(8) and any officer senior in rank to the proper officer may extend the period  to a further period of 6 months and the period or a one year.

If the proper officer fails to determine within such extended period such proceeding shall be deemed to have concluded as if no notice had been issued.

With regards 

J.S.Uppal

[KASTURI SETHI]

Dear Sir,

I want the following information, if possible.

(i) Was pre-notice consultation accorded as required under Section 28(1) of the Customs Act ?

(ii) Was there any breach of conditions of any notification ?

(iii) Any breach of post import conditions ?

(iv) Have you perused Chapter 13 Para 6.7 of CBI & C's Customs Manual, 2023 ?

[Raghunandhaanan rvi]

The goods were cleared in the fiscal year 2018-19, and IGST was remitted at 12% on the imported goods. The customs officer subsequently validated the importer's self-assessment of duty. However, six years later, the department issued a demand notice for the variance in duty with interest, asserting that the IGST payable was 18% and not 12%. The question pertains to the potential invocation of the extended limitation period in this scenario.

To address the query, the following details are required:

1. Description of the imported item

2. The classification used to claim 12% IGST

3. The classification proposed by the department for the item

4. The notification and serial number cited by the department to impose 18% IGST

It is important to note that any deliberate misrepresentation or concealment of facts does not apply in this case, as the customs officer has reviewed and approved the self-assessment of duty. According to section 17(4) of the Customs Act, if, upon verification, the customs officer finds that the self-assessment was not done correctly, the proper officer is empowered to reassess the duty payable on such goods.

AI Summary

Customs limitation period prevents late reassessment absent evidence of fraud or suppression after validated self-assessment and release. Importer paid IGST at a lower rate after customs verification and release; years later customs issued a demand for the differential tax. The core legal question is whether the department may reassess or recover after the statutory limitation period has expired absent positive evidence of fraud or suppression. Reassessment powers are limited when a validated self-assessment was accepted, and statutory procedural timelines and permitted extensions determine whether the proceedings remain maintainable.