Harun Raaj & AssociatesHarun Raaj & Associates
Customs Duty & Trade Policyvia ICEGATE / Customs EDI System

Customs Show Cause Notice Response — Section 28

Expert drafting of replies to Customs Show Cause Notices (SCN) under Section 28 of the Customs Act, 1962 — demand notices for non-payment, short payment, erroneous refunds, and mis-declaration — including personal hearing representation before the adjudicating officer.

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STARTING FROM₹24,999
TYPICAL TIMELINE14 days
DOCS REQUIRED4 documents
APPLICABLE TOCompany, LLP, Firm, Individual

Regulatory Framework

Section 28 of the Customs Act, 1962: demand for duty in certain cases — Sub-section (1) provides for demand for short-levy, non-levy, or erroneous refund within 2 years from the relevant date in normal cases; Sub-section (1A) extends the time limit to 5 years where the short-levy or non-levy is on account of fraud, collusion, wilful mis-statement, or suppression of facts. Section 28(4): mandatory issuance of Show Cause Notice by the proper officer before passing any demand order. Section 28(5): personal hearing — mandatory opportunity of being heard before adjudication, a fundamental requirement of natural justice. Section 28AA: interest on delayed payment of customs duty at 15% per annum from the date the duty was payable until the date of actual payment. Section 114A: penalty for short payment or non-payment of duty — equal to the duty demanded as mandatory minimum; reduced to 25% if duty and interest paid within 30 days of SCN, or 50% if paid within 30 days of final adjudication order. Section 114AB: penalty for mis-declaration and valuation fraud — up to 8 times the duty evaded in cases involving fraud, collusion, wilful mis-statement, or suppression. CBIC Circular on adjudication guidelines and standardized SCN formats.

Overview

When you receive a Show Cause Notice (SCN) from Customs under Section 28 of the Customs Act, 1962, the financial and operational stakes are immediate and significant. An SCN can allege short-payment of customs duty, non-payment, erroneous refund of duty, or mis-declaration of goods — each carrying substantial exposure including the principal duty demanded, interest under Section 28AA at 15% per annum, and penalties that may range from the equivalent of the duty under Section 114A to as much as eight times the duty evaded under Section 114AB in cases involving fraud, collusion, wilful mis-statement, or suppression of facts.

How It Works

  1. 1

    SCN Receipt & Preliminary Assessment

    Upon receiving the Show Cause Notice, our team conducts an immediate preliminary assessment to identify the nature of the demand, the time period under dispute, the sections invoked, and the potential financial exposure including duty, interest under Section 28AA, and penalties under Sections 114A and 114AB.

    Government1-2 days
  2. 2

    Document Collection & Audit Trail Review

    We compile and review all relevant documentation including the original Bills of Entry, Shipping Bills, invoices, packing lists, customs declarations filed on ICEGATE, correspondence with the department, and any prior audit reports.

    Government2-4 days
  3. 3

    Legal Research & Strategy Formulation

    Our legal team conducts comprehensive research on applicable provisions of the Customs Act, 1962, relevant CBIC Circulars, Board-level trade notices, and binding judicial precedents from CESTAT, High Courts, and the Supreme Court.

    Government2-3 days
  4. 4

    Drafting SCN Reply & Filing Submissions

    A detailed, point-by-point reply is drafted addressing every allegation in the SCN, structured with factual submissions, legal arguments, documentary evidence references, and prayers for relief.

    Government2-3 days
  5. 5

    Personal Hearing & Adjudication Representation

    Our senior professionals represent the client at the personal hearing mandated under Section 28(5) before the adjudicating officer. Oral submissions are made and the case is argued on merits.

    Government3-7 days

Frequently Asked Questions

What is a Show Cause Notice under Section 28 of the Customs Act, 1962?
Under Section 28(4) of the Customs Act, 1962, a Show Cause Notice is issued by the proper officer before passing any demand order for customs duty. It is a mandatory requirement under the principles of natural justice, giving the affected party an opportunity to explain why the proposed demand should not be confirmed. Section 28(5) further mandates that the affected party must be afforded a reasonable opportunity of being heard before the adjudication order is passed.
What are the time limits for issuing an SCN under Section 28?
Under Section 28(1) of the Customs Act, 1962, the proper officer must issue the SCN within two years from the relevant date in normal cases of short-levy, non-levy, or erroneous refund. However, Section 28(1A) extends the time limit to five years where the short-levy or non-levy is on account of fraud, collusion, wilful mis-statement, or suppression of facts.
What penalties can be imposed if the demand in the SCN is confirmed?
Under Section 114A of the Customs Act, 1962, the mandatory minimum penalty for short payment or non-payment of duty is equal to the duty demanded. Section 114A provides concessions: if the duty and interest are paid within 30 days of the SCN, the penalty is reduced to 25% of the duty demanded. In cases involving fraud, collusion, wilful mis-statement, or suppression, Section 114AB permits a penalty of up to eight times the duty evaded.
Is a personal hearing mandatory before a demand order can be passed?
Yes. Section 28(5) of the Customs Act, 1962 mandates that before passing any order of demand, the adjudicating officer must afford the affected party a reasonable opportunity of being heard. Failure to provide a personal hearing renders the adjudication order liable to be set aside on appeal.
What interest is payable on delayed payment of customs duty?
Under Section 28AA of the Customs Act, 1962, interest on delayed payment of customs duty is charged at 15% per annum from the date the duty was payable until the date the duty is actually paid, in addition to the principal duty and any penalty.

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