Duty-free container imports: payment of duty on non-re-export defeated confiscation, redemption fine and penalty

Duty-free import of durable containers under Notification No. 104/94-Cus. required execution of a bond and re-export within six months, with duty becoming payable if re-export did not occur. The Tribunal held that the proviso invoked by Revenue was meant for cases where extension of time for re-export was sought. On the stated facts, the importer did not re-export one container for compelling reasons but paid the duty leviable under the notification, thereby discharging the liability in the manner contemplated by the scheme. Confiscation was therefore not justified, and the consequential redemption fine and penalty could not be sustained.

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Issues: Whether confiscation of duty-free imported containers, together with redemption fine and penalty, was justified when the importer failed to re-export one container within the stipulated period but paid the duty leviable thereon under Notification No. 104/94-Cus. dated 16-3-1994.

Analysis: The notification permitted duty-free import of durable containers subject to execution of a bond and re-export within six months, with duty becoming payable upon failure to re-export. The Tribunal held that the proviso relied upon by Revenue was intended for cases where the importer sought extension of time for re-export. On the facts, the importer, for compelling circumstances, did not re-export one container and instead paid the duty leviable under the notification. Since the duty liability was discharged in the manner contemplated by the notification, there was no violation warranting confiscation, and consequential redemption fine and penalty could not be sustained.

Conclusion: Confiscation was not justified and the redemption fine and penalty were not imposable.

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