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PJ/Case Law /2016-17/3379

Does delay in exporting goods only make it legible case for demand of duty with interest and not attract confiscation or imposition of penalty upon assessee ?

 
Case - CALCUTTA SPRING LTD. Versus COMMISSIONER OF CUS. (PORT), KOLKATA
Citation- 2016 (342) E.L.T. 243 (Tri. - Kolkata)
Brief Facts - Appeal has been filed by The appellant against OIA No. 153/CUS (Apprg)/KOL(P)/2015, dated 29-1-2014 passed by Commissioner (Appeals), Strand Road, Kolkata as first appellate authority. Under this OIA dated 29-1-2014 first appellate authority reduced redemption fine to Rs. 1,50,000/- & penalty to Rs. 50,000/- but upheld duty demand of Rs. 3,55,688/-, with interest, decided by the adjudicating authority under OIO dated 4-9-2012.
 
Appellant’s Contention-  The appellant argued that goods were imported under B/E No. 330673, dated 12-3-2007 under Notification No. 158/95-Cus., dated 14-11-1995 for reexport after necessary rectification also appellant executed a bond but the goods after rectification could not be exported within the time prescribed under Notification No. 158/95-Cus., dated 14-11-1995. That show cause notice demanding duty is time-barred. That appellant is also eligible to drawback as under Sec. 74 of the Customs Act, 1962 if appellant is made to pay import duty. That the entire exercise is revenue neutral. That no redemption fine & penalty is imposable upon the appellant as the goods were ultimately exported out of India after rectification.
Respondent’s Contention-  Revenue argued that appellant has not fulfilled the export condition of the exemption notification. That demand cannot be time barred as PD bond was executed at the time of import. That redemption fine & penalties have been correctly imposed as appellant has violated the conditions of exemption notification as per Section 111(o) of the Customs Act, 1962.
 
Reasoning of Judgment –  The first issue involved in these proceedings is whether demand is time-barred or not. It is observed from Para 2 of the show cause notice dated 29-9-2010 that at the time of import of goods a PD bond was executed by the appellant with respect to Notification No. 158/95-Cus., dated 14-11-1995. It has been admitted by the appellant that imported goods could not be re-exported within the prescribed time. By issuing show cause notice dated 29-9-2010. Revenue has taken steps to finalize the provisional assessment by demanding duty. As such demand is not time barred & has been correctly confirmed along with interest but on the issue of confiscation and imposition of penalty it is observed that all the relevant details were declared by the appellant at the time of clearance of goods. A delay in exporting the goods will make a case of demand of duty & interest and will not attract confiscation or imposition of penalty upon the appellant.
 
 
Appeal allowed.
Comment – The gist of the case is that the goods were imported by the appellant for reexport after necessary rectification but the appellant was unable to export the aforesaid & thus show cause notice was issued requiring duty as well as penalty . The first question was time barred of bond on which revenue contended That demand cannot be time barred as PD bond was executed at the time of import. That redemption fine & penalties have been correctly imposed as appellant has violated the conditions of exemption notification as per Section 111(o) of the Customs Act, 1962 & the following was upheld but on the issue of confiscation and imposition of penalty it is observed that all the relevant details were declared by the appellant at the time of clearance of goods. A delay in exporting the goods will make a case of demand of duty & interest and will not attract confiscation or imposition of penalty upon the appellant.
 
 
Prepared by- Alakh Bhandari
 
 
 

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