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2025 (1) TMI 232

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..... State and District bodies. There is nothing in the notification which even remotely suggests that such use is not acceptable. There is no finding in the impugned order that they have not been used for the purpose, but there is only a finding that they were not used by the appellant itself. It would have been a different case if the appellant had sold the imported goods in the market or to individuals. The use of the arms and ammunition in such a case could have been doubted. To accept the Commissioner's reasoning one would have to read in the notification after the words 'use', the words 'by the importer' which cannot be permitted. Confiscation - HELD THAT:- There is no violation of the exemption Notification No. 146/94-Cus by the appellant. The finding that the imported goods were liable to confiscation needs to be set aside. Demand of duty and interest - HELD THAT:- The basis of the demand of duty is also that the appellant had violated the conditions of the Notification No. 146/94-Cus which have been found to be not correct. Consequently, the demand of duty and interest need to be set aside. Penalty under section 114A - HELD THAT:- Penalty under section 114A .....

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..... he Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (2) of the Table hereto annexed and falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from the whole of the duty of customs leviable thereon which is specified in the said First Schedule and from the whole of the additional duty leviable thereon under section 3 of the second mentioned Act subject to the conditions specified in column (3) against each serial number in column (1) of the said Table. TABLE S. No. Description of goods Conditions (1) (2) (3) 1. The following goods:- (a) Sports goods, sports equipments and sports requisites; (a) The said goods are imported into India by a National Sports Federation or Services Sports Control Board in the Ministry of Defence, under a certificate issued by the Sports Authority of India or by the Services Sports Control Board for its own imports or by the Sports Authority of India of by the Sports Authority of concerned State for use in a national or international championship or competition, to be held in India or abroad ; (b) Spar .....

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..... f which is as follows: (i) I hold the firearms and ammunition imported by M/s National Rifle Association of India during the period November 2005 to December 2009, valued at Rs. 10,85,70,571/- (Rupees Ten Crore Eighty Five Lakhs Seventy Thousand Five Hundred Seventy One only) liable to confiscation under section 111 (d) section 111 (o) of the Customs Act, 1962. Since the above said goods are not available for confiscation, no order imposing redemption fine can be passed at this stage. (ii) I confirm the demand of Customs duty amounting to Rs. 3,45,35,591/- (Rupees Three Crore Forty Five Lakhs Thirty Five Thousand Five Hundred Ninety One only) along with interest from the date of import under the said Notification No. 146/94-Cus dated 13.7.1994, as amended, till payment of duty, against M/s National Rifle Association of India, who have knowingly and fraudulently evaded duty in relation to the import of firearms and ammunition during the period from November 2005 to December 2009. (iii) I impose a penalty of Rs. 3,45,35,591/- (Rupees Three Crore Forty Five Lakhs Thirty Five Thousand Five Hundred Ninety One only) on M/s National Rifle Association of India under section 114A of the Cus .....

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..... nistry of Sports and on their recommendation, the DGFT had issued the import licence for import of arms and ammunition. (viii) The letter recommending the issue of licence issued by the Ministry of Sports specifically states that the import of the goods is for supply to the State Rifle Associations, etc. (ix) The appellant had not violated any condition of the licence issued by the DGFT as wrongly concluded by the Commissioner. (x) Once a certificate has been produced as per the notification, exemption cannot be denied by the customs authorities. (xi) Neither the Sports Authority of India who issued the certificate not the DGFT who issued the import licence nor the Ministry of Sports who recommended issue of the import licence cancelled the certificates or licences issued by them. Submissions by the Revenue 10. Learned authorised representative for the Revenue vehemently supported the impugned order and submitted as follows: (i) The appellant had violated the conditions of the Notification No. 146/94 by selling the imported arms and ammunition to the State Rifle Associations and District clubs instead of using them. (ii) The notification does not provide exemption to goods for sale .....

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..... ication No. 146/94-Cus dated 13.7.1994, as amended, on the ground that the post importation conditions were violated inasmuch as the appellant had not used the imported arms and ammunition but sold them to the State Rifle Associations and District clubs. Relying on the judgment of the Supreme Court in Mediwell and the consequent Circular No. 73/2000-Cus dated 1.9.2000, the SCN reasoned that if post importation conditions are violated, in every such violation the date of violation must be reckoned as the beginning of the limitation. 13. The SCN further alleged that the appellant had knowingly and willfully suppressed facts. It proposed confiscation of the goods under sections 111(d) and (o) and imposition of penalty under section 112/114A of the Customs Act. 14. In the impugned order, the Commissioner held that the imported goods valued at Rs.10,85,70,571/- were liable for confiscation under sections 111(d) and (o); confirmed the demand of duty of Rs. 3,45,45,35,591/- along with interest under Notification No. 146/94-Cus dated 13.7.1994 as amended, on the goods imported from November 2005 to December 2009; and also imposed penalty equal to the duty under section 114A of the Customs .....

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..... ted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; 21. The Commissioner recorded that the exemption notification was subject to actual user condition and since the appellant had not used the imported goods for national or international championship or competition to be held in India or abroad, but had sold them to the State Rifle Associations and to District clubs, the actual user condition was not fulfilled and, therefore, the imported goods were liable for confiscation under section 111(o). 22. A plain reading of the notification nowhere shows that there is any 'Actual User' condition. All that is stated is that the goods should be used for national or international championships or competitions. The notification does not say that the importer itself must use them for the purpose. Evidently, when a National Sports Federation imports goods, it does not itself conduct all the championships and competitions directly. It will work through its con .....

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