Penalty cannot follow Form C import unless the assessment is reopened and the concessional claim is first found invalid.

Penalty proceedings for import under Form C could not be sustained without first reopening the original assessment and recording a finding that the concessional import was invalid. Where the assessee had imported goods at the concessional rate and the authorities neither disturbed the assessment nor substituted a higher tax rate on a foundational basis, penalty could not rest only on the omission of the item from registration particulars. The long lapse of time after the import also supported the view that the proceedings were unwarranted.

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Issues: Whether penalty proceedings could be initiated for import of goods under Form C without first finding that the import itself was invalid and without reopening the original assessment.

Analysis: The assessee had imported the weighing machine under Form C and had paid tax at the concessional rate. The authorities did not reopen the original assessment or record a finding that the import was invalid so as to substitute the concessional rate with the higher rate of tax. In the absence of such a foundational finding, the imposition of penalty could not be sustained merely on the premise that the item was not shown in the registration particulars. The lapse of many years after the import also supported the view that the penalty proceedings were unwarranted.

Conclusion: Penalty proceedings were not maintainable in the absence of reopening of the assessment and a finding that the import under Form C was invalid.

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