TMI Blog2022 (8) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... has been short levied or erroneously refunded by reasons of collusion or any wilful mis-statement or suppression of facts by a person, who is liable to pay the duty as determined under sub-Section (2) of Section 28 - sub-section (2) of Section 28 provides that notice under sub-Section (1) should have been first issued. To demand interest under Section 28AB, in such a notice there shall be allegations of collusion or wilful mis-statement or suppression of facts by the person liable to pay duty. Only after considering the representation of the person to whom such a notice has been issued, the proper officer should have determined the amount of duty or interest from such person. Otherwise no interest under Section 28AB can be demanded. None of the pre-conditions required to demand interest under Section 28AB, viz; (a) issuance of notice under Section 28(1) containing justifiable allegations of collusion or wilful misstatement or suppression of facts by the person liable to pay duty; (b) Permit noticee to file representation in response to the notice; (c) Consider such a representation ; and (d) determine the amount of duty or interest due from such person; has been com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r challenging the legality and validity of the show cause notice. The said suit later came to be rejected. 4. By an order dated 4th June 2003, respondent no.3 disposed the show cause notice by ordering confiscation of the medical equipments under Section 111(o) of the said Act and also imposed penalty of Rs.50,000/- on petitioner. Though, in the show cause notice dated 16th July 1998, petitioners were not called upon to show cause as to why petitioners should not be directed to pay customs duty on the medical equipments amounting to Rs.35,73,223/-, respondent no.3 in the order also directed petitioners to pay customs duty of Rs.35,73,223/-. It is rather strange because petitioners were never given an opportunity to show cause on the payment of customs duty. Mr. Shah, stated that notwithstanding this position, petitioners paid the customs duty of Rs.35,73,223/- and the penalty of Rs.50,000/-. Petitioners did not bother to pay the redemption fine on the medical equipments, and in effect abandoned those equipments. Therefore, petitioners did not redeem the confiscated goods. 5. Almost 12 years after the order dated 4th June 2003 was passed by respondent no.3, the Deputy Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents. It is not respondents case that Section 28AB was introduced with retrospective effect. It is not respondents case either that Notification also provided for something similar to that. According to Mr. Shah, therefore, neither provisions of Section 28AB, nor the Notification could be applied to petitioners for the non compliance with the conditions attached in Notification No.64/88-CUS dated 1st March 1988 under which petitioners had imported the medical equipments. 9. Mr. Jetly submitted that petitioners, having committed breach of the conditions attached to Notification No.64/88-CUS, were issued show cause notice and imposed with penalty of Rs.50,000/-. Mr. Jetly states that the medical equipments were also confiscated under Section 111(o) and petitioners were directed to pay customs duty. Mr. Jetly submitted that the customs duty and penalty was paid by petitioners only on or about 23rd February 2012 and, therefore, interest has been claimed under Section 28AB of the Act. Mr. Jetly also submitted that there was no need to mention about interest liability in the original show cause notice. 10. Having heard the submissions of Mr. Shah and Mr. Jetly, one indispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined under sub-Section (2) of Section 28. Section 28 as amended by Finance Act 1995, reads as under: 28. Notice for payment of duties, interest etc. (1) When any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may, (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year; (b) in any other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part 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: Provided that where any duty has not been levied or has been short-levied 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 misstatement or suppression of facts by the importer or the exporter ..... 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