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Issues: (i) Whether the duty paid on the assessed bill of entry could be treated as a pre-deposit for purposes of waiver of penalty, and whether the refund claim was barred by limitation; (ii) Whether the importer was liable to penalty notwithstanding absolute confiscation of the goods and the plea that the goods were supplied through indenting agents.
Issue (i): Whether the duty paid on the assessed bill of entry could be treated as a pre-deposit for purposes of waiver of penalty, and whether the refund claim was barred by limitation.
Analysis: The bill of entry had been assessed under the second appraisement procedure and duty was paid on the assessed value under the import duty head. The payment was therefore duty paid pursuant to assessment and not a mere pre-deposit. The refund application was filed beyond the statutory six-month period and the limitation prescribed for refund claims applied. The subsequent absolute confiscation of the goods did not alter the fact that duty had already become payable on import.
Conclusion: The duty payment could not be treated as a pre-deposit, and the refund claim was correctly rejected as time-barred.
Issue (ii): Whether the importer was liable to penalty notwithstanding absolute confiscation of the goods and the plea that the goods were supplied through indenting agents.
Analysis: The imported goods were found to be spurious and prohibited, attracting confiscation under the Customs law. Liability to penalty arose from the omission that rendered the goods liable to confiscation, and the importer could not avoid responsibility by shifting blame to the indenting agent. The absolute confiscation of the goods did not extinguish the importer's liability to penalty.
Conclusion: The importer was liable to penalty, and pre-deposit of part of the penalty was warranted.
Final Conclusion: The majority view required the appellant to make a pre-deposit of Rs. 50,000 towards penalty, with the balance penalty stayed during the appeal.
Ratio Decidendi: Duty assessed on import remains payable notwithstanding later confiscation, and a person whose omission renders goods liable to confiscation remains liable to penalty even if the goods are absolutely confiscated.
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