2017 (2) TMI 1406 - HC - Customs

Confiscation - Sections 111(j) and 111(f) of Customs Act - Held that - The provisions of clauses (f) and (j) of Section 111 of the Act, providing for confiscation apply only in the case of violations specifically mentioned therein. The facts and circumstances of the transaction before us are not in dispute. Insofar as the purpose of the import was clearly stated as being for use in the proposed Sethusamudram Project which stood frustrated, the bona fides of the transaction is not in dispute - In the present case, we agree with the findings of the CESTAT that the provisions of 111(f) and 111(j) would not stand attracted insofar as there is no contravention of the stipulations contained therein. The substantial questions of law are answered in favour of the assessee - appeal dismissed - decided against revenue.

Summary

Issues:
1. Justification of setting aside confiscation order under S. 111(f) of Customs Act due to incorrect import manifest.
2. Justification of setting aside confiscation order under S. 111(j) of Customs Act for improper permission.
3. Justification of setting aside penalty imposition under S. 112(a) when goods were liable for confiscation.

Analysis:
1. The case involved a dispute over the confiscation of goods under Sections 111(f) and 111(j) of the Customs Act. The appellant raised substantial questions of law regarding the correctness of the import manifest and the alleged suppression of material facts by the importer. The Tribunal set aside the confiscation order, noting that the Customs department had prior knowledge of all relevant facts, including obtaining permission for the coastal run. The Tribunal found no false information or suppression of facts by the importer.

2. The facts of the case revealed that the goods in question were imported for a specific project, which was later frustrated, leading to the sale of the barges and duty remittance. The appellant sought to confiscate a tug for alleged violations under Sections 111(f) and 111(j) of the Act. However, the Tribunal found that the provisions of these sections did not apply in this case as there was no contravention of the stipulated conditions.

3. Regarding the imposition of a penalty under Section 112(a) of the Customs Act, the Tribunal dismissed the appeal of the Revenue. The Tribunal emphasized that all facts and circumstances related to the transaction were known to the Customs department at every stage. Despite the allegations of suppression of facts, no concrete evidence was presented to substantiate such claims. Consequently, the substantial questions of law were resolved in favor of the assessee, and the Department's appeal was dismissed without costs.