Under-Invoicing

Voluntary Deposit, Not a Time-Barred Demand: Delhi High Court Upholds a Customs Settlement Commission's Appropriation of Duty Beyond the Section 28 Limitation Period

An importer of confectionery items voluntarily deposited over ₹85 lakh during a DRI investigation into under-invoicing, and its proprietor admitted the full differential duty liability and asked that the deposit be adjusted against it. When the Settlement Commission later appropriated part of that deposit towards duty for a period beyond the Customs Act's five-year extended limitation period, the importer cried foul. The Delhi High Court dismissed the challenge, holding that Section 28 bars the Revenue's power to raise a fresh demand after the limitation period, but does not bar the appropriation of an amount the importer had already, voluntarily and without qualification, admitted was owed and asked to have adjusted.