Recovery u/s 28AAA of Customs Act Not Valid without Prior DGFT Cancellation of Scrips: CESTAT

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that recovery under Section 28AAA of the Customs Act is not valid without prior DGFT cancellation of scrips. Section 28AAA deals with recovery of duties where incentive schemes (like duty drawback scrips) are misused. This ruling emphasizes a crucial procedural prerequisite: the DGFT (Directorate General of Foreign Trade) must first formally cancel or invalidate the relevant export incentive scrips before customs authorities can initiate recovery proceedings based on their alleged misuse. This ensures due process and coordination between different regulatory bodies.