Levy of Penalty while waiver of customs duty - Foreign Trade ...

Penalty for Unmet Export Obligations Overturned Due to Lack of Legal Contravention Under Trade Regulation Act.

May 15, 2024

Case Laws     Customs     SC

Levy of Penalty while waiver of customs duty - Foreign Trade (Development and Regulation) Act, 1992 (FT Act) - While the rehabilitation scheme sanctioned by BIFR provided for a waiver of customs duty and interest, the penalty was specifically imposed under Section 11(2) of the FT Act for non-fulfillment of export obligations - The court scrutinized the language of Section 11(2) and emphasized that it applies when there is a contravention of the provisions of the FT Act, rules, or foreign trade policy. In this case, the failure to fulfill the export obligation did not amount to a contravention under Section 11(2). As such, the imposition of the penalty was deemed unjustified.

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