2022 (3) TMI 515 - AT - Customs

Exemption from additional duty of Customs - entire case is based on the allegation that the assessees have claimed exemption from additional duty of customs under Notification No.21/2012-Cus wrongly in their bills of entry therefore they were made themselves liable for penalty confiscation redemption fine etc. - HELD THAT - Even as admitted by the assessees there is no dispute that the sugar imported by the assessees attracts additional duty of Customs as there was no exemption from the same in terms of Notification No.21/2012-Cus dated 17.03.2012 during the relevant period. However the revenue apart from denial of exemption also confiscated the goods imposed redemption fine and also imposed consequential penalty. From the entire proceeding it is not found whether the goods were seized and provisionally released on execution of bond for provisional release of goods. It prima facie appears that there is no seizure of goods. The adjudicating authority also in his finding stated that since the goods were provisionally assessed and cleared the said goods can be confiscated and redemption fine was imposed. However since fact about the seizure of goods and provisional release of goods is not clearly coming out from the proceedings the matter needs to be re-considered on the aspect of confiscation and redemption fine. Moreover it is found that in most of the bills of entry the assessees have paid the additional duty of Customs without claiming the exemption therefore in such cases the assessees have made strong prima facie case in their favour. The entire matter needs to be re-considered for the reason that even the confiscation and redemption fine has bearing on penalties imposed by the adjudicating authority - Appeal allowed by way of remand.

Issues Involved:
1. Wrongful claim of exemption notification for additional duty of customs.
2. Provisional assessment and finalization of Bills of Entry.
3. Denial of duty exemption under Notification No. 21/2012-Cus.
4. Recovery of additional duty and interest.
5. Confiscation of imported raw sugar.
6. Imposition of redemption fine.
7. Imposition of penalties under various sections of the Customs Act, 1962.

Detailed Analysis:

1. Wrongful Claim of Exemption Notification for Additional Duty of Customs:
The department contended that the assessees wrongly claimed exemption from additional duty of customs under Notification No. 21/2012-Cus for imported sugar under CTH 1701. The goods were not exempted from additional duty as per the Finance Act, 2011. The assessees argued that the CHA inadvertently mentioned the wrong notification and that they availed the correct exemption under Notification No. 96/2009-Cus for duty-free raw sugar.

2. Provisional Assessment and Finalization of Bills of Entry:
The show cause notice proposed that the provisionally assessed Bills of Entry should be finalized based on test reports. The adjudicating authority confirmed the final assessment under Section 18(2) of the Customs Act, 1962.

3. Denial of Duty Exemption Under Notification No. 21/2012-Cus:
The adjudicating authority denied the benefit of duty exemption under Sr. No. 12 of Notification No. 21/2012-Cus for various quantities of imported raw sugar. The assessees argued that the transaction was revenue-neutral and that they were eligible for Cenvat Credit and refunds under other notifications.

4. Recovery of Additional Duty and Interest:
The adjudicating authority ordered the recovery of additional duty of ?4,18,76,670/- and appropriated the amount already paid by the assessees. Interest was also demanded and appropriated. The assessees contended that they had already paid the duty and interest before the issuance of the show cause notice, and hence, no penalty should be levied.

5. Confiscation of Imported Raw Sugar:
The adjudicating authority ordered the confiscation of various quantities of imported raw sugar under Section 111(m) and 111(o) of the Customs Act, 1962. The assessees argued that the goods were not available for confiscation as they were cleared under Advance Authorization and not under bond or undertaking.

6. Imposition of Redemption Fine:
Redemption fines of ?10,00,00,000/-, ?50,00,00,000/-, and ?20,00,00,000/- were imposed on the assessees for different quantities of sugar. The tribunal noted that the confiscation and redemption fine could not be confirmed in the absence of seizure and provisional release of goods.

7. Imposition of Penalties Under Various Sections of the Customs Act, 1962:
Penalties were imposed under Sections 112(a), 112(b), and 114A of the Customs Act, 1962. The assessees argued that there was no willful misstatement or suppression of facts and that they had paid the duty with interest. The tribunal found that the matter needed reconsideration, especially regarding confiscation and redemption fines, which impacted the penalties.

Conclusion:
The tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh order, considering the issues of confiscation, redemption fine, and penalties. The tribunal emphasized the need for clarity on the seizure and provisional release of goods and acknowledged the assessees' compliance in paying additional duty in most cases.

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