The notice, issued on Monday, has been served in a case that pertains to the seizure of undeclared US dollars from him at the Delhi airport in 2011. Khan lives in Pakistan.

"The show-cause notice has been served to Khan for violation of foreign exchange rules," an ED official said.

The ED has registered a case under the Foreign Exchange Management Act (FEMA) on the basis of a case filed by the Directorate of Revenue Intelligence (DRI).

On February 13, 2011, Khan was going to attend a music programme from India to Dubai in the United Arab Emirates.

Khan, a popular Bollywood playback singer, who was in Delhi to perform at an Indo-Pakistan peace initiative, was to board an Emirates flight to Karachi via Dubai with his entourage of 14 persons.

He was detained at the Indira Gandhi International Airport for travelling with undeclared currency to the tune of $300,000 US dollar (around Rs 2.10 crore) along with Pakistani and Indian currency, the ED official said.

The DRI then said that Khan had not declared the amount to the immigration authorities.

As per rules, a foreign national cannot carry more than $5,000 in cash and $5,000 in other instruments. In the event he has more cash, he has to declare it to the Customs Department.

Khan was unable to give a proper response regarding the source of the money and he also did not show any relevant documents for the same.

According to the DRI sources, Khan was paid in Indian rupees and dollars for his shows in India.

The ED had earlier questioned Khan a number of times.

A case under FEMA is not considered a criminal case. Even the accused is not arrested but if the charges are proven, then the agency can impose heavy fines of up to three hundred times of the said amount.

The 45-year-old nephew of Pakistani singing legend late Ustad Nusrat Fateh Ali Khan was earlier also involved in a controversy when organisers of a concert in Gurugram filed a police complaint against him in July 2010 for his failure to turn up for a show.