2012 (12) TMI 1122 - AT - Customs

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 21/2002-Cus.
2. Applicability of extended period u/s 28 of the Customs Act, 1962.
3. Confiscation of goods u/s 111(o) of the Customs Act, 1962.
4. Imposition of fine and penalty u/s 125 and 112(a) of the Customs Act, 1962.

Summary:

1. Eligibility for exemption under Notification No. 21/2002-Cus:
The appellant, M/s. Air India Ltd., imported an aircraft engine claiming exemption under Notification No. 21/2002-Cus., dated 1-3-2002 (Serial No. 347). The condition for exemption required that the parts be used for the manufacture or servicing of aeroplanes. The Commissioner observed that the engine was kept for repairs and re-export, not for servicing any aeroplane in India, thus not fulfilling the exemption conditions.

2. Applicability of extended period u/s 28 of the Customs Act, 1962:
The Commissioner concluded that the appellant claimed the exemption under an erroneous understanding and there was no wilful misdeclaration or suppression of facts. Hence, the extended period u/s 28 could not be invoked for confirming the duty demand.

3. Confiscation of goods u/s 111(o) of the Customs Act, 1962:
The Commissioner held that the goods were liable for confiscation u/s 111(o) as the appellant did not fulfill the conditions for availing the exemption. The goods were confiscated, and a redemption fine of Rs. 5 lakhs was imposed u/s 125, along with a penalty of Rs. 1 lakh u/s 112(a).

4. Imposition of fine and penalty u/s 125 and 112(a) of the Customs Act, 1962:
The Tribunal upheld the Commissioner's order, stating that the duty demand arises u/s 125(2) and not u/s 28, with no time limit for duty demand under this section. The fine and penalty were deemed appropriate given the value of the goods and the nature of the violation. The Tribunal dismissed the appeal, finding no infirmity in the Commissioner's order.

Conclusion:
The Tribunal upheld the Commissioner's order, confirming the confiscation of goods, imposition of fine and penalty, and the duty demand u/s 125(2) of the Customs Act, 1962. The appeal was dismissed as devoid of merits.