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Issues Involved:
1. Misdeclaration and suppression of facts by the appellant. 2. Eligibility for concessional duty under Heading No. 84.66 of the Customs Tariff Act, 1975. 3. Liability to confiscation under Section 111(m) and (o) of the Customs Act, 1962. 4. Penalty under Section 112 of the Customs Act, 1962. 5. Jurisdiction and propriety of the show cause notices and subsequent adjudication. 6. Applicability of the larger period of limitation under the proviso to Section 28(1) of the Customs Act, 1962. Detailed Analysis: 1. Misdeclaration and Suppression of Facts by the Appellant The appellant was accused of misdeclaration in the application for registration of the machinery as a "Project Import" and in the Bill of Entry dated 12-11-1979. Specifically, it was alleged that the appellant failed to install the machinery in their premises or use it for the substantial expansion of their factory, contrary to their declared intent. The Collector found that the appellant had no intention to use the imported goods for the substantial expansion of their existing unit, as evidenced by an agreement dated 31-7-1979 for the sale and transfer of all assets to another company. This misdeclaration was admitted during the proceedings and was never controverted. 2. Eligibility for Concessional Duty Under Heading No. 84.66 of the Customs Tariff Act, 1975 The machinery was cleared at a concessional rate under Heading No. 84.66 based on the appellant's declaration that it was meant for substantial expansion. However, the Collector concluded that the appellant had no intention to use the machinery for this purpose, as evidenced by the agreement for sale executed before the application for concessional duty. The Collector held that the appellant's declaration was incorrect and the machinery was not entitled to concessional duty. 3. Liability to Confiscation Under Section 111(m) and (o) of the Customs Act, 1962 The machinery was found liable to confiscation under Section 111(m) and (o) due to the misdeclaration and failure to adhere to the conditions of the import license. The machinery was never installed in the appellant's premises and was transferred to another company, violating the conditions of the license. The Collector held that the goods were liable for confiscation, but since they were not available, a penalty was imposed instead. 4. Penalty Under Section 112 of the Customs Act, 1962 Given the liability to confiscation, the Collector imposed a penalty of Rs. 50,000 under Section 112 of the Customs Act. The Tribunal upheld this penalty, noting that the appellant had deliberately suppressed facts and made misstatements to evade duty. 5. Jurisdiction and Propriety of the Show Cause Notices and Subsequent Adjudication The appellant contended that the show cause notices were issued without jurisdiction and that the Customs authorities had no right to inquire into subsequent changes in ownership. The Tribunal rejected these contentions, stating that the Customs authorities have jurisdiction to adjudicate on matters related to the conditions of import and subsequent breaches thereof. The Tribunal also noted that the performance of conditions could only be verified after clearance and that subsequent breaches were relevant to the adjudication process. 6. Applicability of the Larger Period of Limitation Under the Proviso to Section 28(1) of the Customs Act, 1962 The Tribunal upheld the invocation of the larger period of limitation under the proviso to Section 28(1), noting that the appellant had suppressed the intended transfer and misdeclared the purpose of the import. The short levy of duty was a direct result of these actions, justifying the extended period for recovery. Conclusion The Tribunal found no merit in the appellant's contentions and upheld the order of the Collector. The appeal was dismissed, affirming the reassessment of duty, the liability to confiscation, and the imposition of a penalty.
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