Settlement under 28(5) and closure under 28(6)

[Pralhad Jadhav]

The importer pursuant to an investigation and before issuance of SCN, pays the differential customs duty, along with interest under 28AA and 15% penalty.

SCN comes to be issued invoking Section 28 and 124, proposing penalty under 114A, 114AA and fine under 125.

Thereafter, OiO was passed confirming penalty under 114A, 114AA and fine under 125. Inspite the Imported paid differential duty along with interest and 15% penalty, the OiO proposes 100% penalty with an option to pay 25% penalty (effectively 10% as 15% is already paid) along with penalty under 114AA and Fine under 125.

In facts above, request your expert opinion expecially judicial precedent which counters such illegality.  

AI Summary

Customs settlement under Section 28: voluntary duty payment bars enhanced penalties as statutory consequence.
Voluntary payment of differential customs duty with interest and the prescribed reduced 15% penalty under Section 28(5) triggers statutory closure under Section 28(6), extinguishing the short levy demand and divesting the department of jurisdiction to re agitate the same demand or impose enhanced penalties thereafter.