2016 (9) TMI 621 - HC - Customs

Confiscation of consignments - Section 111(o) of the Customs Act, 1962 - imposition of penalties - exemption notification No. 111/95-Cus., dated 5.6.1995 - a self contained code - sub-section (1) of Section 25 of the Customs Act, 1962 - sub-section (2A) of Section 25 of the Customs Act, 1962 - assets of the respondent-company were taken over by the financial institution and sold, is under challenge - closure of respondent s business - Held that - the decision in the case Commissioner of Central Excise, Nagpur v. Vidarbha Veneer Industries Ltd. and others 2016 (8) TMI 707 - SUPREME COURT is followed - appeal disposed off with liberty to the department to get the same revived, in case the respondent-company succeeds in challenge to the sale of assets and revives its business.

Summary

Issues:
1. Confiscation of goods under Section 111(o) of the Customs Act, 1962.
2. Justification of CESTAT in allowing the appeal based on exemption notification No. 111/95-Cus.
3. Issuance of exemption notification under Section 25 of the Customs Act, 1962.

Analysis:
1. The first issue pertains to the confiscation of goods under Section 111(o) of the Customs Act, 1962. The appeal raised substantial questions of law regarding the violation of import conditions by the respondents. The court was tasked with determining whether the subject goods could be confiscated under this section. The respondents argued that their assets had been taken over by a financial institution and subsequently sold, with the sale being contested. They further claimed that the company was currently non-operational.

2. Moving on to the second issue, the court examined the justification of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in allowing the appeal of the respondents. The key point of contention was whether exemption notification No. 111/95-Cus., dated 5.6.1995, constituted a self-contained code specifying benefits, obligations, and circumstances, thereby precluding actions outside the notification concerning imports. The court had to assess whether CESTAT was correct in setting aside the confiscation and penalties based on this exemption notification.

3. Lastly, the issue of the issuance of exemption notification under Section 25 of the Customs Act, 1962 was deliberated upon. The court was tasked with determining whether the mentioned notification, No. 111/95-Cus., dated 5.6.1995, had been issued under the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962. The court needed to ascertain whether any notification issued under the powers derived from the Customs Act formed an integral part of the legislative provisions of the Act unless specific contrary provisions, explanations, or conditions were outlined under such notifications in accordance with sub-section (2A) of Section 25 of the Customs Act, 1962.

In conclusion, the court, in light of developments and the Supreme Court's ruling in a related case, disposed of the appeal with liberty for the department to seek revival if the respondent-company succeeded in challenging the sale of assets and resumed operations.