Customs Act, 1962 Section 28bb — Time limit for completion of certain actions
Customs Act, 1962 · Time limit for completion of certain actions
Plain-English Explanation
Overview
Section 28BB of the Customs Act, 1962 introduces a time limit of two years for completing inquiries or investigations leading to the issuance of a demand notice (Section 28(1) or Section 28(4)). This section ensures timely resolution of customs-related disputes, preventing open-ended investigations and providing certainty to businesses.
Who Does This Apply To?
This section applies to:
- Customs Officers: Specifically those conducting inquiries or investigations related to potential customs duty evasion or short payment.
- Importers and Exporters: Any business or individual engaged in import or export activities that are subject to customs scrutiny.
- Others Subject to Customs Law: Any individual or entity subject to the Customs Act, 1962.
How It Works
- Initiation of Inquiry/Investigation: The clock starts ticking from the date the inquiry or investigation begins.
- Two-Year Time Limit: Customs authorities have two years from the initiation date to conclude the inquiry and issue a notice under Section 28(1) (demand notice for duty not levied/short levied/erroneously refunded) or Section 28(4) (demand notice for duty not paid/short paid/erroneously refunded).
- Extension Provision: The Principal Commissioner or Commissioner of Customs can extend the two-year period by a further one year, but only upon showing sufficient cause, with reasons recorded in writing. The total permissible time for investigation and notice issuance, including extensions, is therefore three years.
- Issuance of Notice is Key: The crucial act is the issuance of the Section 28(1) or Section 28(4) notice within the permissible timeframe. The actual adjudication can happen later.
Important Conditions & Exceptions
- Condition 1: The extension of time beyond two years requires documented justification ("sufficient cause" and "reasons in writing").
- Condition 2: The extension can only be granted by the Principal Commissioner or Commissioner of Customs.
- Exception: The time taken for any stay order granted by a court or tribunal is excluded from the two-year (or three-year) calculation.
- Exception: The time taken to seek information from overseas authorities through a legal process (e.g., Mutual Legal Assistance Treaty) is also excluded from the calculation.
- Exception: This section does not apply to proceedings initiated before the date the Finance Bill, 2021 received Presidential assent.
Practical Example
XYZ Importers is suspected of undervaluing imported goods. Customs initiates an investigation on January 1, 2023. According to Section 28BB, the Customs Department must issue a Section 28(1) notice (demanding the differential duty) by December 31, 2024. However, if a court grants a stay order on the investigation for six months (July 1, 2023, to December 31, 2023), that six-month period is excluded. The revised deadline is then June 30, 2025.
If the Customs Commissioner believes the investigation requires further time (e.g., due to complex valuation issues or voluminous documentation), they can extend the deadline by one year to June 30, 2026, provided they record the reasons in writing.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
What is the time limit for completing customs inquiries or investigations under Section 28BB of the Customs Act, 1962?
Section 28BB(1) mandates that any customs inquiry or investigation leading to the issuance of a notice under Section 28(1) or 28(4) must be completed within two years from the date the inquiry or investigation was initiated. This involves issuing the aforementioned notice within this timeframe.
Can the two-year time limit for completing customs investigations under Section 28BB be extended?
Yes, the Principal Commissioner of Customs or the Commissioner of Customs can extend the two-year period for investigation completion by a further one year. This extension is granted only if sufficient cause is demonstrated and the reasons for the extension are recorded in writing, as per the proviso to Section 28BB(1).
What periods are excluded when calculating the time limit for completing customs investigations under Section 28BB?
Section 28BB(2) specifies that the period during which a stay order was granted by a court or tribunal is excluded from the calculation. Additionally, the time spent seeking information from an overseas authority through a legal process is also excluded when computing the overall investigation timeframe.
When did Section 28BB of the Customs Act, 1962, come into effect, and does it apply retroactively?
Section 28BB was introduced through the Finance Act, 2021. The explanation to Section 28BB clarifies that the provisions of this section do not apply to proceedings initiated before the date the Finance Bill, 2021, received presidential assent; thus, it's not retroactive.
Does Section 28BB apply to all types of notices issued under Section 28 of the Customs Act, 1962?
No, Section 28BB specifically applies to inquiries or investigations that culminate in the issuance of a notice under Section 28(1) (recovery of duties not levied or short-levied) or Section 28(4) (recovery of duties in cases involving collusion, willful misstatement, or suppression of facts).
What happens if a customs investigation exceeds the time limit prescribed under Section 28BB?
While Section 28BB establishes a time limit, it doesn't explicitly state the consequences of exceeding this limit. However, exceeding the time limit could potentially render any notice issued under Section 28(1) or 28(4) after the prescribed period challengeable in court based on non-compliance with statutory timelines. It can be argued that the investigation is time-barred.
How does seeking information from overseas authorities affect the timeline for customs investigations under Section 28BB?
When customs authorities need to gather information from overseas authorities through a legal process, the time taken for this process is excluded from the overall time limit for completing the investigation, as stated in Section 28BB(2). This exclusion acknowledges the potential delays inherent in international information exchange.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Inquiry/Investigation Time Limit | Inquiries or investigations resulting in a Section 28(1) or 28(4) notice must be completed (notice issued) within two years of initiation. |
| Extension of Time Limit | The Principal Commissioner or Commissioner can extend the two-year period by one year for sufficient cause, documented in writing. |
| Exclusion for Stay Orders | The period during which a stay is granted by a court or tribunal is excluded from the computation of the time limit. |
| Exclusion for Overseas Information Requests | The period for seeking information from an overseas authority through legal process is excluded from the time limit. |
| Retrospective Applicability Excluded | This section does not apply to proceedings initiated before the Finance Bill, 2021 received presidential assent. |
Amendment History
Inserted (w.e.f. 28-03-2021) s. 92 of Finance Act 2021 (13 of 2021)