Section 28 — Recovery of duties not levied/paid, short-levied/paid or erroneously refunded

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Governs recovery of duty not levied/not paid/short-levied/short-paid or erroneously refunded. It contains separate limitation and settlement consequences for non-fraud and fraud/suppression cases. The 2024 Supreme Court Canon India review materially reset the proper-officer jurisdiction position.

Statutory position and legal effect

For Section 28 — Recovery of duties not levied/paid, short-levied/paid or erroneously refunded, the decisive question is not whether the transaction feels commercially similar to another case but whether the statutory conditions are proved on the record. The analysis should state the conclusion first, then identify the subsection/proviso relied upon, the material date, the linked delegated instrument and the document that proves compliance. Where the conclusion depends on a rate, value, exemption, limitation period or notification, reproduce the calculation logic and citation in the working file so that another professional can independently reconstruct the result.

A recurring Customs risk is cross-contamination between concepts. Classification is not valuation; valuation is not the rate date; exemption eligibility is not the same as assessment procedure; and a refund or recovery proceeding is not automatically a forum to reopen every earlier assessment. Section 28 should therefore be placed in the transaction chain at the point where Parliament intended it to operate. If a later procedural route—appeal, amendment, voluntary revision, refund, reassessment or demand—is required, the page identifies that route rather than implying that one provision cures all defects.

For historical transactions, use the law in force on the material date. Amendments in 2025 and 2026 materially changed parts of Chapter V and Chapter VB. A current guide can explain those changes, but it should not retroactively apply the new rule to an earlier import/export unless the amending law expressly does so. Conversely, a pre-amendment practice note should not be copied into a 2026 transaction when Parliament has supplied a new route or deadline.

Official-text rule: Quote the current India Code/Gazette wording in pleadings, opinions and statutory filings. This guide explains application and controls; it does not replace the enactment.

Applicability, rights, obligations and decision workflow

1. Classify the case as non-fraud or fraud/collusion/wilful-misstatement/suppression.
2. Fix the correct relevant date and limitation period, including the 18A revised-entry rule introduced in 2025.
3. Confirm the issuing/adjudicating officer has statutory jurisdiction in light of the 2024 Canon India review and current notifications.
4. Reconcile voluntary payment, interest, penalty and closure consequences under the applicable sub-section.

Chapter V sits at the heart of customs liability. A reliable opinion should not jump directly from a tariff heading to a payable number. The sequence is normally: identify the charge, classify the goods, determine assessable value, fix the statutory rate date, apply any valid exemption, compute every duty/cess component, then identify the assessment or refund/recovery procedure. Each step can have a different governing date and different evidence. A later notification cannot ordinarily be back-applied to an earlier import merely because it produces a commercially fair result. Likewise, portal acceptance is evidence of processing, not a substitute for statutory eligibility.

For every live matter, retain the bill of entry or shipping bill, invoice, packing list, transport and insurance papers, classification note, valuation working, exemption notification with serial/condition, licence or authorisation where relevant, payment challans and the assessment/reassessment order. Where a dispute exists, preserve the exact version of the Act, Rules and notification in force on the material date. This is especially important after the 2025 reforms to provisional assessment, voluntary post-clearance revision and refund/recovery limitation, because a file that spans pre- and post-reform periods may be governed by different procedural routes.

The Customs Tariff Act supplies tariff rates and additional-duty architecture; the Customs Act supplies the charging, valuation, assessment, exemption, refund and recovery machinery. The two must be read together. Circulars and manuals assist administration but cannot override the Act, Rules, a valid notification or a binding judgment.

For a professional conclusion, identify who bears the obligation, what event activates the section, whether any proviso or exception changes the headline rule, and what document proves that the event occurred. If another provision supplies the filing route or consequence, cross-reference it expressly instead of collapsing the two sections into one.

Provisos, thresholds, timelines and safeguards

The exact provisos and explanations in section 28 must be read before using the headline rule. Time limits are calculated from the statutory trigger rather than from an assumed commercial date. Where the section relies on a notification or regulation, that instrument may add eligibility, form, fee, end-use, evidence or sunset conditions. If a discretionary power is exercised against the taxpayer, the file should record jurisdiction, reasons, opportunity requirements and the statutory basis for the consequence.

Where amendments changed the provision, preserve a material-date concordance. This is especially important for 2025–26 customs changes: the section 18/18A regime, the section 27/28 links, the section 25 exemption review and the section 28J five-year rule should not be projected backward without statutory support.

Rules, notifications, circulars and operational instruments

The table identifies instruments materially relevant to this provision. For a live consignment, re-check later amendments, serial numbers, end dates and port-specific implementation on the official CBIC/ICEGATE/Gazette source.

Case law — provision-specific research matrix

Worked example

Customs alleges undervaluation discovered after clearance. The file first fixes the relevant date and whether the evidence supports fraud/suppression. It then checks the proper-officer assignment under the post-2024 Canon India position, quantifies duty/interest and separately evaluates any statutory reduced-penalty or closure route.

The worked result should be retained with a short calculation/evidence note: facts assumed, provision applied, material date, linked instrument, numerical consequence (if any) and the document that proves each condition. A different fact—such as a later notification, related-party relationship, different clearance route or pending enforcement action—can change the answer.

Evidence and compliance checklist

• Bill of entry / shipping bill / bill of export and assessment trail
• Commercial invoice, packing list, transport/insurance and technical literature
• Classification, valuation, rate-date and duty computation working
• Exact rule/regulation/notification version applicable on the material date
• ICEGATE acknowledgement and officer communications, without treating portal status as the legal source
• Payment/refund/recovery records and appellate or amendment documents where relevant

Where the provision creates a deadline, add the due date and responsible owner to the compliance calendar. Where it depends on product facts, retain technical literature and sample/test records. Where it depends on a monetary computation, retain an auditable spreadsheet or system extract showing the inputs and formula.

Common mistakes and professional traps

• Relying on a generic summary instead of the exact text of section 28 and its provisos.
• Ignoring a recent statutory/judicial change that materially alters the 2026 position.
• Using a notification/rule version that was not in force on the material date.
• Treating a portal result or past clearance as conclusive proof of legal entitlement.
• Failing to preserve the calculation and evidence chain needed for review or appeal.

Related provisions

• Section 27A — Interest on delayed refunds
• Section 28A — Non-recovery based on general practice
• Section 17 — Assessment of duty
• Section 28AA — Interest on delayed payment of duty
• Section 28BA — Provisional attachment to protect revenue
• Section 124

Read connected provisions together but keep their legal functions separate. A charging rule, valuation rule, exemption, assessment step, refund route and demand power solve different questions and may have different limitation periods.

Finin2min Q&A

What is the practical function of section 28?

What should be frozen before relying on this provision?

The material date, customs document, goods description/classification, statutory version, applicable delegated legislation and the evidence that proves each condition should be frozen before the conclusion is signed off.

Can an ICEGATE acceptance or system message by itself prove legal entitlement?

No. Portal processing is important evidence, but statutory eligibility still depends on the Act, Rules/regulations, notification conditions and binding law applicable to the transaction.

What is the safest litigation record?

Keep the primary customs documents, contemporaneous correspondence, calculation sheet, legal-source copies for the material date, evidence index and any assessment/reassessment/refund/recovery order in one chronological file.

Can a Section 28 notice still be attacked simply because it was issued by DRI?

Not on the old Canon India 2021 proposition alone. In the 7 November 2024 review judgment, the Supreme Court held, subject to its directions, that DRI and similarly situated officers are proper officers for Section 28.

Primary-source trail

India CodeGazette of IndiaCBIC Tax InformationCourt record where available

Source review date: 2026-10-05. Historical matters require the Act, rule, notification and judicial position applicable to the relevant date. Where a reported judgment is linked through a recognised retrieval service because an official court copy was not readily accessible, verify the signed judgment before quoting paragraph numbers in litigation.

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