Scrip fraud cases under section 28AAA: Customs must first adjudicate the misdeclaration, then ask DGFT to cancel
Instruction 17/2026-Customs tells field formations how to decide show cause notices that were held up because DGFT had not cancelled the instrument — in three situations the wait is no longer the rule.
In 30 seconds
- Misdeclaration in the shipping bill: Customs investigates and adjudicates first, amends the shipping bill, then refers the matter to DGFT.
- Policy, eligibility or entitlement issues: refer to DGFT first; DGFT’s view prevails.
- Where DGFT cannot cancel on technical or legal grounds: adjudicate on merits without waiting.
- In all other cases, adjudication only after DGFT cancels the instrument.
हिंदी में सार
Customs Act की धारा 28AAA के तहत जारी show cause notice अक्सर इसलिए अटके थे कि DGFT ने scrip रद्द नहीं की थी। CBIC के Instruction 17/2026 के अनुसार shipping bill में गलत घोषणा के मामलों में पहले Customs जाँच और adjudication करेगा, फिर DGFT को भेजेगा; policy या पात्रता के मामलों में DGFT की राय मानी जाएगी; और जहाँ DGFT कानूनी कारण से रद्द नहीं कर सकता, वहाँ बिना इंतज़ार के फैसला होगा।
The old instruction
Section 28AAA of the Customs Act, 1962 provides for recovery of duty from the person to whom an instrument or scrip was issued, where it was obtained by collusion, wilful misstatement or suppression of facts. A TRU letter of 1 June 2012 advised that demands be issued as soon as DGFT initiates cancellation, but decided only after DGFT cancels the instrument. Field formations reported that cases were stuck for want of that cancellation.
What the Board has now said
| Situation | What Customs does |
|---|---|
| Fraud alleged on misdeclaration in the shipping bill — misclassification, overvaluation or other incorrect declaration | Investigate and adjudicate under the Customs Act, amend the shipping bill where warranted, then refer to DGFT for cancellation of the scrip. |
| Fraud alleged on policy interpretation, eligibility or entitlement | Refer to DGFT first. DGFT’s view on validity and entitlement prevails, and the Customs proceedings are decided accordingly. |
| DGFT is unable to cancel on technical or legal grounds, including a court order | Proceed with adjudication and decide on merits. |
| All other cases where DGFT has initiated cancellation | Adjudicate only after DGFT cancels the instrument. |
The Board records DGFT’s position that scrips should not be cancelled solely on allegations, suspicions or requests from DRI or Customs without a final determination and an amendment to the shipping bill — and agrees with it.
Published 21 September 2026. Updated 2 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.