Query - ca final custom

FINANCE Act 2012 inserted a new Section 28AAA in the Customs Act, which provided for recovery of duties, from the person to whom the instrument such as duty credit scrips was issued, where the instrument was obtained by means of collusion or wilful mis-statement or suppression of facts by the such person without prejudice to any action that may be taken against the importer.

For recovery, the Proper Officer is required to serve a notice on the person to whom the instrument was issued. Now, who is the proper officer?

CBEC has by Notification No. 40/2012-Cus NT dated 02.05.2012, designated several officers as proper officers and Deputy Commissioner/Assistant Commissioner of Customs and Central Excise are designated as proper officers under Section 28AAA.This includes all the officers above the rank of Assistant Commissioner/Deputy Commissioner. Now the Board has issued a notification designating the DD/AD of DRI and DGCEI also as proper officer under Section 28AAA.

Notification No. 76/2012 - Customs, (N T), Dated: August 27, 2012 

Recovery of duty from original scrip holder in fraud cases

A new section 28AAA has been inserted into the Customs Act, to enable recovery of duty from the original holder of an instrument (duty exemption or remission scrip) that was obtained by fraudulent means. In other words, if an exporter was found to have obtained, say, a DEPB scrip, by means of collusion or wilful misstatement of suppression of facts, then import duties related to use of that scrip by a transferee can be demanded from this original holder. (This is without prejudice to demand under section 28 against the importer who used the scrip.)  The section is applicable to use of a scrip after 28 May 2012, even if it was obtained before that date.

Section 28BA of the Customs Act is amended to make it applicable to recovery of duty under this new section 28AAA. Thereby, property can be provisionally attached to protect duty during the pendency of proceedings under section 28AAA.