Decoding the Interplay of Customs Duty, Interest, and Confiscation Proceedings

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..... ticle delves into the intricate interplay between customs duty liability, interest payments, and confiscation proceedings under the Customs Act. It examines the core legal questions surrounding the imposition of customs duty and interest when goods are redeemed after confiscation, and the applicability of various sections of the Act in such scenarios. ARGUMENTS PRESENTED The primary contentions of .....

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..... e Customs Act, precedents, and the reasoning process: Liability to Pay Customs Duty: The court affirmed the principle established in the Security Finance case that customs duty is payable when confiscated goods are redeemed u/s 125 , even though the duty liability arises from exercising the redemption option and not from Sections 12 or 28 . The court clarified that the Fortis Hospital case [ 1975 .....

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..... s applicable. Section 28AB mandates the payment of interest in addition to the duty, thereby attracting interest liability in confiscation proceedings where goods are redeemed. ANALYSIS AND DECISION The court's conclusions on each issue can be summarized as follows: There is a liability to pay customs duty when confiscated goods are redeemed after payment of fine u/s 125 of the Customs Act. Th .....

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..... confiscated goods is liable to pay customs duty and charges when exercising the option to redeem the goods u/s 125(2) . This duty liability arises not from Sections 12 or 28 but from the specific provision of Section 125(2) . Distinction between Liability and Assessment: The court drew a clear distinction between the origin of the duty liability ( Section 125(2) ) and the procedure for assessing .....

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..... larification ensures consistent interpretation and application of the relevant provisions. Overall, this decision reinforces the doctrinal principles governing customs duty liability, interest payments, and confiscation proceedings, providing clarity and guidance for future cases involving similar issues. Full Text : 2024 (7) TMI 1221 - Supreme Court - FAQ - Frequently Asked Questions, TMI Short .....

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