Recovery of duties in certain cases [Section 28AAA] :
The provisions of this section enable recovery of duty from the original holder of an instrument (duty exemption or remission scrip or duty credit scrip) that was obtained by fraudulent means. To illustrate, if an exporter was found to have obtained, say, a DEPB scrip, by means of collusion or willful misstatement of suppression of facts, then import duties related to use of that scrip by a transferee can be demanded from this original holder. At the same time, demand can also be raised under section 28 against the importer who used the scrip.
The provisions of the section are discussed below in detail:
Recovery of duty from the original holder of the instrument: Where an instrument issued to a person has been obtained by him by means of —
(a) collusion; or
(b) willful misstatement; or
(c) suppression of facts,
and such instrument is utilised by a person other than the person to whom the instrument was issued, the duty relatable to such utilisation of instrument shall be deemed never to have been exempted or debited and such duty shall be recovered from the person to whom the said instrument was issued.
However, such recovery of duty against the person to whom the instrument was issued shall be without prejudice to an action against the importer under section 28.
| Instrument means any scrip or authorisation or licence or certificate or such other document, by whatever name called, issued under the Foreign Trade (Development and Regulation) Act, 1992, with respect to a reward or incentive scheme or duty exemption scheme or duty remission scheme or such other scheme bestowing financial or fiscal benefits, which may be utilised under the provisions of this Act or the rules made or notifications issued thereunder. |
The section is applicable to use of a scrip after 28th May 2012, even if the scrip was obtained before that date [Sub-section (1)].
Liability to pay interest: Interest will also be payable on the duty so recoverable at the rate fixed under section 28AA from the date of utilisation of the instrument till the date of recovery of such duty [Sub-section (2)].
Manner of recovery of duty and interest: The proper officer shall serve show cause notice on the person to whom the instrument was issued. Such person will have to reply to the notice within 30 days from the date of receipt of the notice as to why the amount specified in the notice (excluding the interest) should not be recovered from him.
The proper officer will determine the amount of duty or interest or both to be recovered from such person and pass the order after giving that person an opportunity of being heard. Such person will have to repay the amount so specified in the notice within a period of 30 days from the date of receipt of the said order, along with the interest due on such amount, whether or not the amount of interest is specified separately [Sub-section (3)].
If such person fails to repay the amount within the period of 30 days, it shall be recovered in the manner laid down in sub-section (1) of section 142 [Sub-section (5).
Where an order determining the duty has been passed under section 28, no order to recover that duty can be passed under this section [Sub-section (4)].