Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded
Section 28 of the Customs Act, 1962 deals with recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. levied or short-paid] or erroneously refunded.--(1) Where any [duty has not been levied or not paid or short-levied or short-paid] or erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any wilful m The Act came into force on 01 Feb 1963.
1[28. Recovery of 2[duties not levied or not paid or short-levied or short-paid] or erroneously refunded.--(1) Where any 3[duty has not been levied or not paid or short-levied or short-paid] or erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any wilful mis-statement or suppression of facts, --
(a) the proper officer shall, within 4[two years] from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied 5[or paid] or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:
6[Provided that before issuing notice, the proper officer shall hold pre-notice consultation with the the person chargeable with duty or interest in such manner as may be prescribed;]
(b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of, --
(i) his own ascertainment of such duty; or
(ii) the duty ascertained by the proper officer,
the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid.
7[Provided that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred.]
(2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty or interest so paid or any penalty leviable under the provisions of this Act or the rules made thereunder in respect of such duty or interest:
8[Provided that where notice under clause (a) of sub-section (1) has been served and the proper officer is of the opinion that the amount of duty along with interest payable thereon under section 28AA or the amount of interest, as the case may be, as specified in the notice, has been paid in full within thirty days from the date of receipt of the notice, no penalty shall be levied and the proceedings against such person or other persons to whom the said notice is served under clause (a) of sub-section (1) shall be deemed to be concluded.]
(3) Where the proper officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of 9[two years] shall be computed from the date of receipt of information under sub-section (2).
(4) Where any duty has not been 10[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,--
(a) collusion; or
(b) any wilful mis-statement; or
(c) suppression of facts,
by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been 11[so levied or not paid] or which has been so short-levied or short-paid or to whom the the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice.
(5) Where any 12[duty has not been levied or not paid or has been short-levied or short paid] or the interest has not been charged or has been part-paid or the duty or interest has been 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 the employee of the importer or the exporter, to whom a notice has been served under sub- section (4) by the proper officer, such person may pay the duty in full or in part, as may be accepted by him, and the interest payable thereon under section 28AA and the penalty equal to 13[fifteen per cent.] of the duty specified in the notice or the duty so accepted by that person, within thirty days of the receipt of the notice and inform the proper officer of such payment in writing.
(6) Where the importer or the exporter or the agent or the employee of the importer or the exporter, as the case may be, has paid duty with interest and penalty under sub-section (5), the proper officer shall determine the amount of duty or interest and on determination, if the proper officer is of the opinion --
(i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) or sub- section (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or
(ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable, then, the proper officer shall proceed to issue the notice as provided for in clause (a) of sub-section (1) in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of 14[two years] shall be computed from the date of receipt of information under sub-section (5).
(7) In computing the period of 14[two years] referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded.
15[(7A) Save as otherwise provided in clause (a) of sub-section (1) or in sub-section (4), the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed, and the provisions of this section shall apply to such supplementary notice as if it was issued under the said sub-section (1) or sub-section (4).]
(8) The proper officer shall, after allowing the concerned person an opportunity of being heard and after considering the representation, if any, made by such person, determine the amount of duty or interest due from such person not being in excess of the amount specified in the notice.
(9) The proper officer shall determine the amount of duty or interest under sub-section (8),--
(a) within six months from the date of notice, 16*** in respect of cases falling under clause (a) of sub- section (1);
(b) within one year from the date of notice, 16*** in respect of cases falling under sub-section (4).
15[Provided that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under sub-section (8), extend the period specified in clause (a) to a further period of six months and the period specified in clause (b) to a further period of one year:
Provided further that where 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;]
15[(9A) Notwithstanding anything contained in sub-section (9), where the proper officer is unable to determine the amount of duty or interest under sub-section (8) for the reason that--
(a) an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal or the High Court or the Supreme Court; or
(b) an interim order of stay has been issued by the Appellate Tribunal or the High Court or the Supreme Court; or
(c) the Board has, in a similar matter, issued specific direction or order to keep such matter pending; or
(d) the Settlement Commission has admitted an application made by the person concerned,
the proper officer shall inform the person concerned the reason for non-determination of the amount of duty or interest under sub-section (8) and in such case, the time specified in sub-section (9) shall apply not from the date of notice, but from the date when such reason ceases to exist.]
(10) Where an order determining the duty is passed by the proper officer under this section, the person liable to pay the said duty shall pay the amount so determined along with the interest due on such amount whether or not the amount of interest is specified separately.
17[(10A) Notwithstanding anything contained in this Act, where an order for refund under sub-section (2) of section 27 is modified in any appeal and the amount of refund so determined is less than the amount refunded under said sub-section, the excess amount so refunded shall be recovered along with interest thereon at the rate fixed by the Central Government under section 28AA, from the date of refund up to the date of recovery, as a sum due to the Government.
(10B) A notice issued under sub-section (4) shall be deemed to have been issued under sub-section (1), if such notice demanding duty is held not sustainable in any proceeding under this Act, including at any stage of appeal, for the reason that the charges of collusion or any wilful mis-statement or suppression of facts to evade duty has not been established against the person to whom such notice was issued and the amount of duty and the interest thereon shall be computed accordingly.]
18[(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of section 4 before the 6th day of July, 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section.]
Explanation 1.--For the purposes of this section, relevant date means, --
(a) in a case where duty is 19[not levied or not paid or short-levied or short-paid], or interest is not charged, the date on which the proper officer makes an order for the clearance of goods;
(b) in a case where duty is provisionally assessed under section 18, the date of adjustment of duty after the final assessment thereof or re-assessment, as the case may be;
(c) in a case where duty or interest has been erroneously refunded, the date of refund;
(d) in any other case, the date of payment of duty or interest.
Explanation 2.--For the removal of doubts, it is hereby declared that any non-levy, short-levy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, shall continue to be governed by the provisions of section 28 as it stood immediately before the date on which such assent is received.]
20[Explanation 3.--For the removal of doubts, it is hereby declared that the proceedings in respect of any case of non-levy, short-levy, non-payment, short-payment or erroneous refund where show cause notice has been issued under sub-section (1) or sub-section (4), as the case may be, but an order determining duty under sub-section (8) has not been passed before the date on which the Finance Bill, 2015 receives the assent of the President, shall, without prejudice to the provisions of sections 135, 135A and 140, as may be applicable, be deemed to be concluded, if the payment of duty, interest and penalty under the proviso to sub-section (2) or under sub-section (5), as the case may be, is made in full within thirty days from the date on which such assent is received.]
21[Explanation 4.-- For the removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or in any other provision of this Act or the rules or regulations made thereunder, or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, shortpayment or erroneous refund, prior to the 29th day of March, 2018, being the date of commencement of the Finance Act, 2018 (13 of 2018), such notice shall continue to be governed by the provisions of section 28 as it stood immediately before such date.]
Section 28, The Customs Act, 1962 (Act 52 of 1962).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 19
- s. 28AA Interest on delayed payment of duty
- s. 28AAA Recovery of duties in certain cases
- s. 28BA Provisional attachment to protect revenue in certain cases
- s. 28BB 28BB. Time limit for completion of certain actions
- s. 28J Applicability of advance ruling
- s. 28K Advance ruling to be void in certain circumstances
- s. 110AA Action subsequent to inquiry, investigation or audit or any other specified purpose
- s. 112 Penalty for improper importation of goods, etc
- s. 114 Penalty for attempt to export goods improperly, etc
- s. 114A Penalty for short-levy or non-levy of duty in certain cases
- s. 125 Option to pay fine in lieu of confiscation
- s. 127I Power of Settlement Commission to send a case back to the proper officer
and 7 more
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Commr. of Customs vs Sayed Ali
Court's Decision & Legal Precedent
A proper officer under Section 2(34) of the Customs Act, 1962, is only such a customs officer who has been assigned the specific functions of assessment and reassessment of duty by the Board or Commissioner of Customs. Mere appointment as an officer of Customs with territorial jurisdiction over a port is insufficient to confer proper officer status. Accordingly, a show cause notice under Section 28 of the Act for reassessment of goods cleared for home consumption can only be issued by the officer assigned assessment functions in the jurisdictional area where the bill of entry was filed and the goods were cleared, not by any other officer even if he has territorial jurisdiction over that area. In the present case, since the Commissioner of Customs (Preventive), Mumbai, was never assigned the specific function of assessment or reassessment of goods entered for home consumption under Section 28, he was not competent to issue the show cause notice, notwithstanding his territorial jurisdiction.
On this section: Provides for notice for payment of duties not levied, short-levied, or erroneously refunded. Court held that this notice must be issued by proper officer as defined in Section 2(34), with specific assignment of assessment/reassessment functions.
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Chandna Impex P. LTD vs Commr. of Customs
Court's Decision & Legal Precedent
A question regarding the jurisdiction of the authority issuing a show cause notice under the Customs Act (specifically whether the Directorate of Revenue Intelligence Additional Director General is a proper officer under Section 28) constitutes a substantial question of law that must be examined on appeal by the High Court with reasoned orders. The High Court cannot dismiss statutory appeals by non-speaking orders that merely endorse lower court reasoning without independent application of mind. Where such a jurisdictional question is raised but not properly examined by the High Court, it is appropriate for the Supreme Court to remand the matter to the Tribunal for fresh adjudication rather than remit to the High Court first, particularly when new precedent (Sayed Ali) has emerged that was not available during the original Tribunal hearing, to avoid prolongation of litigation.
On this section: Definition Of Proper Officer Who Can Initiate Customs Proceedings
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Commissioner of Customs, Bangalore vs Gmr Energy LTD
Court's Decision & Legal Precedent
Where imported goods under a rotable exchange programme are valued at published catalogue prices that are list unit prices established worldwide without adjustment for return of used parts, and no 'sale' occurs under the agreement, the invoice value based on such catalogue prices constitutes the proper assessable value under customs law, and additional value corresponding to returned parts cannot be added merely because used parts are returned to the foreign supplier under the agreed rotable exchange programme, absent explicit evidence in the invoices themselves showing the prices were adjusted downward to account for such returns.
On this section: Basis for demanding short-paid duty
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Rexnord Electronics and Controls LTD vs Union of India
Court's Decision & Legal Precedent
The jurisdiction of the Settlement Commission under Section 127H of the Customs Act to grant immunity from interest is limited to interest payable under the provisions of the Customs Act itself. Interest payable under a contractual bond executed in terms of an exemption or duty notification, though issued under statutory authority, retains its contractual character and falls outside the Settlement Commission's powers of waiver or immunity. The Settlement Commission lacks the authority to grant immunity from such contractual obligations without the consent of both parties to the contract.
On this section: Governs the procedure for initiating proceedings for non-payment of customs duty and provides for interest recovery framework
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… In our view, consolidated show cause notices covering multiple financial/assessment years can be issued only in circumstances where the statutory provision provides for a common period for initiation and completion of the adjudication. For instance, under Section 28 of the Customs Act, a show cause notice invoking the extended period of limitation of five years has to cover a prior period of five years ending with the date of issuance of the show cause notice. Similar was the W.A.No.258/25 :: 8 :: provision under Section 11A of the …
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… UOI <sup>9</sup>. 7. Mangali Impex was concerned with the Customs (Amendment and Validation) Act, 2011<sup>10</sup> and pursuant to which Section 28(11) had come to be introduced in the Customs Act. While we shall have an occasion to deal with the aforenoted judgments as well as the statutory amendments which came to be introduced in the latter part of this decision, suffice it to note that according to the respondents, the delay in adjudication was neither …
Made under this section, and citing it
4 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 13 instruments name this provision in its title or its text without being made under it.
- Clarification regarding other persons (co-noticees) used in sub-section (2) & sub-section (6) of the Section 28 of the Customs Act, 1962.- Circular No.11/2016-Customs, dated 15.3.2016Circular 2016
- - Instructions regarding Section 28 BA of the Customs Act, 1962.- Circular No.10/2008-Customs, dated 30.6.2008Circular 2008
- adjudication of cases relating to cases investigated by DRI and DGCEI.- Circular No.14/2014-Customs, dated 11.12.2014Circular 2014
- Notification No.53/2012-Cus(NT), dated 21.06.2012Notification 2012
- Adjudication of appraising related Show Cause Notices.- Circular No.44/11-Customs, dated 23.09.11Circular 2011
- Implementation of 'On Site Post Clearance Audit' - Circular No.47/2011-Customs, dated 21.10.11Circular 2011
- Revision in the powers of adjudication of the officers of Customs.- Circular No.24/2011-Customs, dated 31.5.11Circular 2011
- Powers of adjudication of the officers of Customs.-Circular No.23/2009-Customs, dated 1.9.2009Circular 2009
- Customs- Monitoring of de novo customs adjudication cases.- Circular No.4/2007-Customs, dated 10.1.2007Circular 2007
- Customs-Time Limit for adjudication of customs cases related to search / seizures. - Circular No.3/2007-Customs, dated 10.1.2007Circular 2007
- Notification No.21/2004-Cus(NT), dated 23.02.2004Notification 2004
- Powers of adjudication of Additional Commissioner of Customs. - Circular No.47/1997-Customs, dated 6.10.1997Circular 1997
- Finance Act, 1995 - Interest on arrears of confirmed demands - Circular No.58/1995-Customs, dated 31.5.1995Circular 1995
Questions about Section 28
What have the courts held on Section 28 of the Customs Act?
Commr. of Customs vs Sayed Ali (18 Feb 2011) is the leading judgment on this section among those set out below: Provides for notice for payment of duties not levied, short-levied, or erroneously refunded. Court held that this notice must be issued by proper officer as defined in Section 2(34), with specific assignment of assessment/reassessment functions. Another 3 judgments on this section are set out below, all of them from the Supreme Court. They run from 2008 to 2015.
How do I find court cases under Section 28 of the Customs Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Customs Act 1962 28, section 28 Customs Act 1962, section 28 of the Customs Act. People searching for it also type customs act 28 4 and customs act 28 5. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Commr. of Customs vs Sayed Ali (18 Feb 2011).
What should I read with Section 28 of the Customs Act, and has it changed?
Its own text turns on section 4 (Appointment of officers of customs), section 17 (Assessment of duty), section 18 (Provisional assessment of duty), section 27 (Claim for refund of duty), and on 4 further provisions, so none of them can safely be read on its own. 19 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 4: most recently Notification No.29/2018-Cus(NT), dated 2.4.2018 (2018), then Notification No.40/2018-Cus(NT), dated 11.5.2018 (2018), and 2 more.
When did Section 28 of the Customs Act come into force?
Section 28 of the Customs Act, cited as Customs Act 1962 28, came into force on 01 Feb 1963, having been enacted on 13 Dec 1962. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions1638 words
- 129A. Appeals to the Appellate Tribunal1170 words
- 27. Claim for refund of duty1060 words
- 127C. Procedure on receipt of an application under section 127B1056 words
- 138C. Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence872 words
- 129D. Powers of Committee of Principal Chief Commissioner of Customs or Chief Commissioner of Customs or Principal Commissioner of Customs or Commissioner of Customs to pass certain orders861 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.