2012 (10) TMI 42 - HC - Customs

Confiscation of goods and imposition of fine - violation of Section 111(o) of the Customs Act, 1962 Held that - Assessee imported the capital goods but not to the extent of Rs. 1 Crore, he cannot have the benefit of waiver of duty - assessee paid the duty and for delayed payment, he paid interest and thus, he did not avail the benefit of that notification - assessee conducting himself contrary to the notification thus exposing himself to the order of confiscation, do not arise - when once the assessee pay the duty and interest, goods will be out of the ambit of the said notification and they cannot be held liable for confiscation under Section 111(o) of the Act - in favour of the assessee

Summary

Issues:
Challenge to order of confiscation and imposition of fine and penalty based on violation of Section 111(o) of the Customs Act, 1962.

Analysis:
The case involved an appeal by the revenue against the order of the Customs, Excise and Service Tax Appellate Tribunal, which set aside the order of confiscation of goods and imposition of fine and penalty due to a violation of Section 111(o) of the Customs Act, 1962. The appellant imported equipment under the EPCG license scheme but failed to comply with the conditions specified in the Customs notification, rendering them ineligible for exemption. The Tribunal held that since the appellant did not fulfill the conditions stipulated in the notification, they were required to pay the duty and interest, and the question of confiscation did not arise. The Tribunal's decision was based on the appellant's failure to meet the threshold import level of Rs. 1 Crore as mandated by the notification.

The revenue contended that the appellant's non-compliance with the notification terms triggered Section 111(o) of the Act, making them liable for duty payment and confiscation. However, the counsel for the appellant supported the Tribunal's decision. The Court emphasized that the benefit of exemption under the notification was contingent upon meeting specific conditions, including the import threshold. As the appellant did not fulfill these conditions, they paid the duty and interest, precluding any confiscation action under Section 111(o) of the Act. The Court upheld the Tribunal's ruling, stating that the appellant's failure to avail the exemption meant they were not subject to confiscation. Consequently, the appeal was dismissed, with costs not awarded.

In conclusion, the Court affirmed the Tribunal's decision, ruling in favor of the appellant and against the revenue. The judgment clarified that failure to meet the conditions of the Customs notification precluded the appellant from confiscation under Section 111(o) of the Act. The case highlighted the importance of complying with notification requirements to avail of exemptions and avoid potential confiscation actions.