The Central Board of Indirect Taxes and Customs (CBIC) on September 21, 2026, has issued clarification regarding the adjudication of cases under Section 28AAA of the Customs Act, 1962, particularly where Show Cause Notices involve allegedly fraudulently obtained DGFT instruments/scrips and cancellation by DGFT is pending.
The following has been stated:
Where fraud is alleged due to misdeclaration in the Shipping Bill, including misclassification or overvaluation, Customs/DRI must first investigate and adjudicate the misdeclaration and, where warranted, amend the Shipping Bill. The matter may thereafter be referred to DGFT for consequential action, including cancellation of the scrip.
Where the allegation concerns policy interpretation, eligibility, entitlement or other matters falling within DGFT's domain, the matter should first be referred to DGFT, whose determination regarding the validity and entitlement of the instrument/scrip will be followed by Customs/DRI.
Where DGFT is unable to cancel the instrument/scrip due to technical or legal grounds, including where cancellation is precluded by a court order, Customs adjudicating authorities should proceed with the Section 28AAA SCN and decide the case on merits, rather than keeping it pending for cancellation.
In other cases, where DGFT has initiated cancellation proceedings, adjudication under Section 28AAA should take place only after the instrument/scrip has been cancelled by DGFT.
[Circular No.: F. No. CBIC-140605/13/2024-DBK]
