Section 28 Demand Without Prior Appeal Against Assessment: CESTAT Ahmedabad’s Ruling in Famous Steel

1. Background and Context of the Dispute

The dispute in Famous Steel Vs Commissioner of Customs (CESTAT Ahmedabad) arose from imports of cold rolled flat products of stainless steel originating from China, classified under CTH 7219. The assessee, M/s Famous Steel, Mumbai, filed two Bills of Entry:

  • Bill of Entry No. 9855513 dated 30.01.2019
  • Bill of Entry No. 3407185 dated 27.05.2019

The goods were cleared for home consumption based on self-assessment.

At the time of import, these goods attracted Anti Dumping Duty @ 57.39% under Notification No. 61/2015-Cus (ADD) dated 11.12.2015, applicable to certain cold rolled stainless steel flat products falling under CTH 7219 originating from People’s Republic of China. However, no anti-dumping duty was discharged during self-assessment. Correspondingly, IGST on such anti-dumping duty was also not paid.

Upon subsequent scrutiny, the department took the view that anti-dumping duty and consequential IGST had not been levied/paid and therefore initiated proceedings under Section 28 of the Customs Act, 1962.

2. Initiation of Proceedings and Adjudication

2.1 Show Cause Notice and Proposed Demand

A show cause notice dated 06.01.2021 was issued to the assessee proposing:

  • Recovery of Anti Dumping Duty of Rs. 20,95,712/-
  • Recovery of IGST of Rs. 3,77,228/-
  • Both under Section 28(1) of the Customs Act, 1962
  • Along with interest under Section 28AA of the Customs Act, 1962 read with Section 50 of the CGST Act, 2017
  • And penalty under Section 117 of the Customs Act, 1962

2.2 Order of the Adjudicating Authority

The Additional Commissioner, by order dated 28.05.2021,:

  • Confirmed the demand of:
    • Anti Dumping Duty: Rs. 20,95,712/-
    • IGST: Rs. 3,77,228/-
  • Invoked:
    • Section 28(1) of the Customs Act, 1962 read with Section 5 of the IGST Act, 2017
    • Interest under Section 28AA of the Customs Act, 1962 read with Section 50 of the CGST Act, 2017
  • Imposed penalty of Rs. 4,00,000/- under Section 117 of the Customs Act, 1962

The assessee challenged this order before the Commissioner (Appeals), primarily contending that the self-assessment could not be disturbed without first setting aside or modifying the assessment through appellate proceedings, relying on ITC Ltd., 2019-TIOL-418-SC-CUS-LB and other decisions. The Commissioner (Appeals) rejected the appeal and upheld the original order. This led to the further appeal before CESTAT Ahmedabad.

3. Assessee’s Key Grounds Before CESTAT

The assessee advanced the following principal arguments in the appeal before the Tribunal:

3.1 Bar on Reopening Self-Assessment Without Appeal

  • It was argued that the impugned order effectively re-opened the self-assessment in respect of the Bills of Entry by imposing anti-dumping duty pursuant to Notification No. 61/2015-Cus (ADD) dated 11.12.2015.
  • Relying on ITC Ltd., 2019-TIOL-418-SC-CUS-LB, it was submitted that:
    • Even self-assessment constitutes an assessment order.
    • Any party aggrieved by such assessment—whether the assessee or the department—must challenge the assessment through the appellate route under Section 128 or other prescribed provisions.
    • Without first modifying or setting aside the assessment, the department could not resort to Section 28 to effectively re-assess the goods.
  • It was contended that issuance of a demand/show cause notice under Section 28 without appealing the original self-assessment is contrary to the ratio of ITC Ltd..

3.2 Reliance on Axiom Cordages Ltd. and Tripura Ispat

  • The assessee placed strong reliance on:
    • **Axiom Cordages Ltd.