2017 (5) TMI 320 - AT - Customs

Import of certain parts and machinery of the export goods - N/N. 104/2009 - Status Holder Incentive Scrip Scheme - denial on the ground that said notification issued under the scheme is only for various capital goods - confiscation - penalty - Held that - the appellant had declared the goods correctly with the claim of notification. It was now in the hands of Customs Authority to examine such claim of the assessee and to allow or deny the benefit of the same - It is well settled law that claim of any exemption benefit by the importer, which claim stand made by correctly declaring the goods, cannot lead to any confiscation or imposition of penalty. The appellant according to their understanding, had claimed the benefit of N/N. 104/09 and had correctly placed all the facts before the Customs authorities - confiscation and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to confiscation of goods with redemption fine and personal penalty under section 112(A)(ii) of the Customs Act, 1962.

Analysis:
The appeal in this case pertains to the confiscation of goods with an option to redeem them on payment of a redemption fine and a personal penalty under section 112(A)(ii) of the Customs Act, 1962. The appellant had imported certain parts and machinery of export goods, claiming the benefit of notification No. 104/2009 under the Status Holder Incentive Scrip Scheme. However, it was found that the goods imported were not covered by the said scheme, leading the Revenue to deny the benefit of the notification.

During the proceedings, the appellant's advocate acknowledged the denial of the notification's benefit but argued that since they paid the duty in cash and utilized the credit in the next import, they were not seriously contesting the denial. On the other hand, the Revenue contended that the importer had a special responsibility and should have been aware that the goods were not covered by the scheme. They argued that the appellant's claim for exemption reflected malafide intent, justifying the confiscation of goods and imposition of a penalty.

The Tribunal observed that the appellant had correctly declared the goods with the claim of notification, leaving it to the Customs Authority to examine and allow or deny the benefit. It was emphasized that correctly declaring goods and claiming an exemption benefit should not lead to confiscation or penalty. The Tribunal agreed with the appellant's stance that the denial of the notification's benefit should not result in guilt for any contravention. Consequently, the Tribunal set aside the confiscation of goods and the penalty imposed, allowing the appeal with consequential relief.

In conclusion, the Tribunal's decision highlights the importance of correctly declaring goods and the Customs Authority's role in determining the eligibility for exemption benefits. It also underscores that a mere denial of a benefit claimed in good faith should not lead to punitive measures such as confiscation and penalties, especially when the importer has acted in accordance with their understanding and provided all relevant information to the authorities.