Setback for Tiptop Furniture: CESTAT Upholds Department's Right to Issue SCN for Short Levy of Duty [Read Order]
The tribunal referred to the Madras High Court's decision in Venus Enterprises, which affirmed that an SCN for short-levied duty can be issued post-clearance.
![Setback for Tiptop Furniture: CESTAT Upholds Departments Right to Issue SCN for Short Levy of Duty [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Tiptop-Furniture-CESTAT-SCN-taxscan.jpg "Setback for Tiptop Furniture: CESTAT Upholds Departments Right to Issue SCN for Short Levy of Duty [Read Order]")
The Bangalore Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) upheld the department's right to issue a show-cause notice (SCN) for the short levy of duty in the case of Tiptop Furniture Industries. Tiptop Furniture Industries,appellant-assessee,imported goods under Bill of Entry No. 9522851 dated 09.03.2013, listed as ‘sofa fabrics’. During an audit, a show-cause...
The Bangalore Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) upheld the department's right to issue a show-cause notice (SCN) for the short levy of duty in the case of Tiptop Furniture Industries.
Tiptop Furniture Industries,appellant-assessee,imported goods under Bill of Entry No. 9522851 dated 09.03.2013, listed as ‘sofa fabrics’. During an audit, a show-cause notice was issued on 08.11.2013, alleging a short levy of Rs. 2,80,563/- in duty, with a demand for payment and interest. The adjudicating authority(AA) confirmed the demand under Section 28(8) of the Customs Act, 1962. The assessee appealed to the Commissioner (Appeals), but the order was upheld.
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Aggrieved by the order the assessee appealed before the tribunal.
The assessee's counsel argued that since the Bill of Entry was assessed and customs duty paid, with goods cleared for home consumption under Section 47 of the Act, the subsequent demand for duty was unjustified. This was supported by several case rulings.
The Revenue counsel argued that during an audit of the assessed Bill of Entry, a short levy of Rs. 2,80,563/- was noticed, leading to the issuance of a show-cause notice under Section 28(1) of the Act.
The counsel stated that the demand was made within the prescribed limitation period and that the Department could recover the short levy through the notice, even if the assessment was done earlier. He referred to the judgment in Venus Enterprises vs. CC, Chennai, which was upheld by the Supreme Court.
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The two member bench comprising of D.M.Mishra(Judicial Member) and Pullela Nageswara Rao(Technical Member) considered both sides and the records. The main issue was whether a notice under Section 28(1) of the Customs Act could be issued for short levy after the Bill of Entry was assessed.
It found this issue was settled by the Madras High Court in Venus Enterprises. The Court ruled that a show-cause notice for short-levied duty could be issued even after goods were cleared, as Section 28(1) allows for recovery in such cases. The Court also stated that accepting the appellant's argument would make the provision in Section 28(1) redundant.
Therefore, the appellate tribunal concluded that the short-levied duty could be recovered under Section 28(1) of the Act.
In short,the appeal filed by the assessee was rejected.
To Read the full text of the Order CLICK HERE
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