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Demand of customs duty and penalty under Sections 28, 114A of the Customs Act. Interpretation of Sections 28 and 147 of the Customs Act regarding duty payment liability in case of misappropriation by CHA. Analysis: The judgment dealt with a case involving a demand of customs duty and penalty on the appellants under Sections 28 and 114A of the Customs Act. The dispute arose from a situation where the CHA, entrusted with paying the duty on imported goods, misappropriated the funds, leading to non-realization of customs duty by the Revenue. The appellants argued that Section 28 of the Customs Act applies only in cases of non-levy or short-levy of duty, not in instances of non-payment or short-payment. They relied on a Supreme Court judgment to support their position, drawing a distinction between 'levy' and 'collection' of duty. However, the DR contended that the Supreme Court's judgment was specific to central excise duty and not applicable to customs duty scenarios, emphasizing the importer's primary obligation to pay the duty. Regarding Section 147 of the Customs Act, the appellants claimed they should not be held liable for the CHA's fraudulent actions. The DR argued that despite the CHA's involvement, the duty remained unpaid, placing the responsibility on the importer to fulfill the obligation. Both sides presented detailed arguments analyzing various provisions of the Customs Act to support their positions. The Tribunal found the importer-appellant prima facie liable to pay the duty to the Government, despite the non-realization of duty by the Revenue due to the CHA's actions. The Tribunal directed the appellants to pre-deposit a specified amount within a set timeframe, emphasizing the importer's primary liability to pay the duty while suggesting civil action against the CHA for recovery. The decision highlighted the importance of fulfilling duty payment obligations and the consequences of non-payment, underscoring the importer's responsibility in such situations.
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