2011 (1) TMI 1312 - AT - Central Excise

Summary

Issues: Import of firearms and ammunition under EXIM policy relaxation, alleged violation of licensing restrictions, demand of duty, penalty, and redemption fine.

Analysis:
1. Import under EXIM policy relaxation: The National Rifle Association of India (NRAI) imported firearms and ammunition between 1995 to 2003 based on a certificate from the Sports Authority of India, exempted from licensing requirements under Notification No. 146/94-Cus. The imports were for distribution to State Level Federations.

2. Alleged violation and demand of duty: A show cause notice claimed that the imported arms and ammunition were sold to State Rifle Associations against licensing restrictions and exemption conditions. The Commissioner demanded duty of &8377; 4,24,12,787/-, interest, penalty, and imposed a redemption fine, alleging violation of the notification and licensing conditions.

3. Appellant's defense: NRAI, as a national coordinating agency, procured the items for distribution to State Federations with Sports Ministry's certificate. They argued that the items were used for intended purposes through State Federations, with no misuse alleged. They contested the duty demand beyond five years and the penalty imposed.

4. Revenue's stance: The Revenue contended that the sale of arms and ammunition by NRAI breached the notification and licensing conditions, seeking pre-deposit of the amounts as per the Commissioner's order.

5. Tribunal's decision: After reviewing submissions and records, the Tribunal analyzed the notification's conditions and historical amendments. It noted that NRAI's imports were recommended by the Sports Ministry for national and international competitions, finding no evidence of misuse. Considering NRAI's societal role and financial status, the Tribunal waived pre-deposit and stayed recovery pending appeal.

In conclusion, the Tribunal ruled in favor of the National Rifle Association of India, granting a stay on the recovery of dues and penalties until the appeal's final disposal, based on the lack of evidence supporting the alleged violation of exemption conditions and the organization's societal contributions and financial constraints.