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of <h1>Customs Duty Exemption Denial Upheld, Penalties Imposed</h1> <h3>PATEL ENGINEERING LTD. Versus COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI</h3> PATEL ENGINEERING LTD. Versus COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI - 2013 (295) E.L.T. 243 (Tri. - Mumbai) Issues Involved:1. Denial of duty exemption under Notification 21/2002.2. Confiscation and redemption of imported capital goods.3. Demand of customs duty and imposition of penalties.4. Compliance with conditions of the exemption notification.5. Limitation period for issuing show-cause notice.Issue-Wise Detailed Analysis:1. Denial of Duty Exemption under Notification 21/2002:The appellants imported a 'Paver Finisher' claiming duty exemption under Notification 21/2002, Sr. No. 230. They provided an undertaking to use the paver exclusively for road construction and not to dispose of it for five years. The Revenue contended that the appellants violated this condition by diverting the paver to other entities before five years, thus denying the exemption. The Tribunal noted that the paver was found at a site unrelated to road construction, confirming the violation of the notification's conditions.2. Confiscation and Redemption of Imported Capital Goods:The imported paver was confiscated but allowed to be redeemed on payment of Rs. 25 lakhs. The Tribunal upheld the confiscation, stating that the appellants breached the undertaking by using the paver for non-road construction purposes. This breach justified the confiscation and subsequent redemption fine.3. Demand of Customs Duty and Imposition of Penalties:The Tribunal confirmed the demand of Rs. 1,30,46,188/- in customs duty and a penalty of Rs. 2.5 lakhs on the appellants. Additional penalties were imposed on co-appellants. The Tribunal found that the appellants failed to fulfill the conditions of the exemption notification, thus liable for the duty and penalties imposed.4. Compliance with Conditions of the Exemption Notification:The appellants argued that they complied with the pre-import conditions by executing the necessary bond and that the notification did not require post-import compliance. They cited precedents to support their claim. However, the Tribunal distinguished these cases, emphasizing that the appellants did not use the paver for its intended purpose of road construction, thus violating the notification's conditions.5. Limitation Period for Issuing Show-Cause Notice:The appellants argued that the show-cause notice was time-barred under Section 28 of the Customs Act. The Tribunal rejected this argument, stating that the violation of the undertaking constituted suppression of facts, justifying the extended limitation period. The show-cause notice was deemed issued within the permissible time frame.Conclusion:The Tribunal upheld the denial of duty exemption, confiscation and redemption of the paver, demand of customs duty, and imposition of penalties. The appellants' arguments regarding compliance with the notification conditions and limitation period were rejected. The appeals filed by the appellants and the Revenue were dismissed, affirming the adjudicating authority's order.
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