A few months ago, a mid-sized importer walked into our office in Delhi, looking disturbed, deflated, and on the edge of insolvency.
Their Advance Authorisation licence was under fire.
Their IEC was suspended.
And worst of all, a ₹8 crore Show Cause Notice from Customs had landed on their desk.

The charge?
👉 Undervaluation of imported goods.
👉 Misuse of concessional duty benefits under the Advance Authorisation Scheme.

💼 But when we studied the documents, here’s what we found:
All imports had proper Bills of Entry and invoices.
Foreign remittances were made exclusively through banking channels.
The DGFT conditions were fully complied with.
No concrete evidence—just assumptions and cut-and-paste allegations.
⚖️ Our Approach:
Drafted a point-by-point reply under Section 124 of the Customs Act, citing the relevant DGFT Handbook provisions.
Demanded pre-SCN consultation, as per CBIC norms.
Brought in the WTO Valuation Rules to counter the vague “undervaluation” charge.
Strategically followed up with personal hearings and representations.

✅ Outcome:
Duty demand reduced from ₹8 Cr to ₹1.75 Cr.
No penalty or prosecution.
IEC restored.

Business resumed operations in less than 30 days.

🔎 Key Takeaways for Importers/Exporters:

Don’t ignore a Show Cause Notice. It’s a serious document, but not final.
You have the right to contest it legally, and many SCNs crumble under scrutiny.
Always respond within the time frame, and avoid delaying a legal consultation. Early strategy makes a huge difference.

📩 If you or someone you know has received a Customs SCN or duty demand, DM me “Customs SOS”.
We’ll assess it and guide you through every legal step.

Ajay Kummar Pandey
Advocate, Supreme Court of India
GST & Customs Litigation | Advisory | 4C Supreme Law International

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