9911796707
TMI Blog2025 (1) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order is assailed both on merits and on limitation. 2. The appellant claims to be a federation of affiliated State Rifle Shooting Associations, All India Board, Union Territories, District Rifle Shooting Rifle Associations, Rifle Shooting Clubs and that it regulates and coordinates their activities including securing and supplying arms, ammunition, shooting equipment and other accessories for them. 3. Import of arms and ammunition required for rifle shooting is restricted and hence they can be imported only on a licence issued by the Director General of Foreign Trade [DGFT]. They are also exempted from the whole of duty by Notification No. 164/94-Cus dated 13.7.1994 subject to some conditions. The appellant obtained the licences as required from DGFT and also availed the benefit of exemption notification. 4. Notification No. 146/94-Cus was amended from time to time and it read as follows during the relevant period. "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has been importing and supplying arms and ammunition to the State Rifle Associations and District clubs as it is part of its mandate. 7. For an earlier period in respect of the arms and ammunition imported between 1995 and 2005, Directorate General of Revenue Intelligence [DRI] initiated an investigation and came to the conclusion that the exemption notification was available only if the importer itself used the arms and ammunition in the championships and competitions indicated in the notification and that the exemption would not be available if the importer sells arms and ammunition to the State Rifle Associations or District clubs to use in competitions and championships. Accordingly, DRI issued an SCN dated 16.2.2009 demanding duty which proposals were confirmed by the Commissioner by an order dated 17.11.2009. On appeal, this Tribunal remanded the matter to the Commissioner who has yet to pass a de novo order. 8. This appeal pertains to subsequent period covering 2005 -2009 and SCN dated 28.9.2011 which culminated in the impugned order, the operative part of which is as follows: (i) I hold the firearms and ammunition imported by M/s National Rifle Association of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ser" condition nor is any requirement of producing evidence of actual use. No bond or legal undertaking was required under the notification and none was executed by the appellant. (v) The imported goods were used for the intended purpose and there is no allegation in the SCN or finding in the impugned order that they have not been so used. The only allegation is that the appellant itself had not used them but sold them to the State Rifle Associations and District clubs (who used them for the purpose). (vi) The entire demand of duty is time barred as DRI had earlier issued an SCN on the same issue for an earlier period which was adjudicated by the Commissioner and on appeal was remanded to the Commissioner for de-novo adjudication. Therefore, the department was fully aware of the functioning of the appellant and how it uses the imported goods. Therefore, for a subsequent period, a demand invoking extended period of limitation could not have been issued. (vii) Import of arms and ammunition in dispute is restricted and an import licence from DGFT is required. The appellant had applied to the Ministry of Sports and on their recommendation, the DGFT had issued the import licence f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuous obligation since no time is specified within which they must be used. Until the goods are sold or diverted by the importer (instead of using them as required), there was no cause of action. The cause of action arose as soon as the goods are sold or diverted. The limitation in such a case arises on the date of violation of the condition of the notification as per the judgment of the Supreme Court in Mediwell Hospital & Health Centre Private Ltd. versus Union of India [1997(89) ELT, 425(SC)]. CBEC had issued a Circular No. 73/2000 dated 1.9.2000 following the judgment of the Supreme Court. (vi) The general limitation under section 28(1) would not apply where there is a breach of condition of the exemption notification after import. (vii) Submission of bond or legal undertaking is not required to demand duty. (viii) The impugned order may be upheld and the appeal may be dismissed. Findings 11. We have considered the submissions advanced on behalf of the appellant and on behalf of the Revenue and perused the records. 12. The SCN proposed a demand under Section 28(1) of the Customs Act of the duty foregone under Notification No. 146/94-Cus dated 13.7.1994, as amended, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such goods which are imported in violation of any prohibition are liable for confiscation. As per the Foreign Trade Policy, arms and ammunition could be imported on a licence issued by the DGFT and undisputedly, they were imported on the strength of a licences. If, after import, some of the conditions of import licences are violated, section 111(d) does not render them liable for confiscation because the import was as per the licence. 18. At any rate, it is for the DGFT who issued the licence to determine if any of the conditions of licence were violated or not and take action, if necessary. 19. For both these reasons, goods which were imported as per the licences issued by DGFT but which were thereafter suspected to be used in violation of the conditions of the licences, will not be liable for confiscation under section 111(d). Confiscation under section 111(o) 20. The Commissioner held that the goods were liable to confiscation under section 111(o) which reads as follows: 111. Confiscation of improperly imported goods, etc. The following goods brought from a place outside India shall be liable to confiscation:- Xxx (o) any goods exempted, subject to any condition, fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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