Customs - Deemed Conclusion, Other Person, Co- noticee - Board Clarification
AS per proviso to Section 28(2) of the Customs Act, if duty with interest has been fully paid 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 notice is served, shall be deemed to be concluded.
There is a similar provision under Section 28(6)(1) of the Act.
Who are the 'persons' or ‘other persons' under these provisions? Board has been asked this question. The Board after examining the issue clarifies:
1. Provision of deemed conclusion of proceedings was introduced in the Section 28 so as to bring about closure to the cases where the dues to the Government could be realized without going through the process of adjudication on one hand and to cut the protracted litigation which generally follows the adjudication on the other.
2. The provision of deemed conclusion is contingent upon the person to whom a SCN has been issued paying up all the dues of duty, interest and penalty.
3. Only in such a circumstance of compliance, shall closure of proceedings against other persons come into effect.
4. Therefore, as a corollary, other persons implies person(s) to whom no demand of duty is envisaged.
5. Other persons who happen to be co-noticees in the SCN for their acts of commission or omission other than demand of duty would be benefitted by the deemed closure in cases where the compliance of conditions mentioned in proviso to sub-section (2) or clause (i) of sub-section (6), as the case may be, by the main noticee to whom inter-alia a demand of duty has been issued has been fulfilled.
6. All such cases where proceedings reach closure stage under the provisions of Section 28, an order to the effect must be invariably issued by the concerned adjudicating authority.
7. Section 28 primarily deals with the recovery of duty or erroneous refund. While introducing the facility of deemed conclusion, enabling provision was made for payment of interest and/ or penalty. Therefore, all such SCNs or cases which involve duty, interest and/ or payment of penalty shall be covered by the above clarification.
Incidentally, the Tribunal has been taking this stand since a long time. See (in the context of Settlement Commission orders), , 2016-TIOL-28-CESTAT-MUM.
CBEC Circular No. 11/2016-Customs., Dated: March 15, 2016