The court affirmed that demand notices for IGST short payment are valid under the Customs Act, despite claimed bona fide mis-declaration, as there were no supporting documents for amending the bill of entry.

J U D G M E N T

In these cases, the challenge raised by the petitioners is with regard to the demand notices issued against them (Ext.P6 in W.P.(C) No. 38971 of 2024 and Ext.P5 in W.P.(C) No. 38995 of 2024), demanding the amount of IGST short-paid, when the petitioners carried out certain imports. The said demand letters were issued based on Ext.P1 orders issued in both cases under Sec.28 of the Customs Act, 1962 .

2. The facts which led to the filing of these writ petitions are as follows:- In WP(C) 38971/2024, the petitioner is a partnership firm and conducting business under the name and style ‘Al Kabeer Exporters’. The firm is registered under the Kerala Goods and Services Tax Act, 2017, Central Goods and Services Tax Act and the Integrated Goods and Services Tax Act 2017. As part of the business of importing dates and other food products, the petitioner imported different grades of semi- dried dates, as per Bill of Entry No.7617965 dated 08.05.2020 through Cochin Sea Port. In the Bill of Entry furnished by the petitioner, the goods were classified as semi-dried dates and included under the CTH08041020. However, in the said bill of entry, the petitioner availed exemption from IGST that was available for fresh dates. Accordingly, the goods were cleared, by collecting duty at the rate of customs duty 20% + Social Welfare Surcharge (SWS) 10% + IGST nil. Later, during the post clearance audit of the above mentioned Bill of Entry, it was found that, IGST exemption was wrongfully availed by the petitioner, since, the semi dried dates, which was the declared goods as per the bill of entry, was not eligible for exemption and they attract IGST @ 12% as per notification No. 1/2017 dated 28.06.2017. Accordingly, a show cause notice was issued to the petitioner on 06.01.2022, proposing to initiate proceedings under Sec.28 of the Act and for demanding interest under Sec.28AA of the Customs Act 1962. The petitioner did not reply to the show cause notice dated 06.01.2022 and did not appear on the date of personal hearing on 14.02.2022, 21.03.2022, 31.03.2022 and 22.04.2022.

Accordingly Ext.P1 order was issued on 11.05.2022.

3. In WP(C) No. 38951/2024 also, the similar events occurred and the petitioner brought semi-dried dates as per Bill of Entry No.7174298 dated 21.01.2022 and claimed exemption available for fresh dates. Thus, the petitioner got the goods cleared without making payment of IGST @ 12%. In this case also, on post clearance audit of the Bill of Entry, the aforesaid discrepancy came to the notice of the authorities concerned and accordingly, a notice dated 28.12.2022 was issued to the petitioner directing him to remit a short levy of duty of Rs.2,32,988/-. The importer did not reply to the pre- notice consultative letter and therefore, a short cause notice was issued to the petitioner therein on 06.02.2022 asking him to show cause as to why short levy amount should not be demanded along with interest as contemplated under Sec.28AA of the Act. During the course of hearing, the petitioner therein appeared before the officer concerned, accepted the incorrect classification and agreed to pay the short-levied duty without any fail. Accordingly, Ext.P1 order was passed therein, directing the petitioner to pay Rs.2,32,988/- along with interest under Sec.28AA of the Customs Ac, 1962.

4. Even though the petitioners paid certain amounts based on the said orders, the entire amount was not settled and it was in those circumstances, the demand notices, as referred to above, were issued to the petitioners. These writ petitions were submitted in such circumstances, challengin