Holistic duty adjustment across multiple clearances permitted, and penalty waived where permission was sought before clearance.

Where a duty demand covered multiple clearances, the appellate forum treated the liability holistically rather than splitting the consignments artificially, and allowed adjustment of duty already paid on the returned goods against the demand. On the appellant's own calculation, the duty payable under the relevant invoice was lower than the amount already paid, so the demand was reduced. On penalty, the assessee had sought permission from the jurisdictional authority before clearance and the delay in response came from the department, so a lenient approach was warranted and the penalty was set aside.

---

---

Issues: (i) Whether the duty payable on both consignments had to be determined together in appeal and the amount paid on the rejected goods could be adjusted against the demand; (ii) whether penalty was warranted in the facts of the case.

Issue (i): Whether the duty payable on both consignments had to be determined together in appeal and the amount paid on the rejected goods could be adjusted against the demand.

Analysis: The original adjudication had raised demand in respect of both clearances, and the appellate stage could not divide them artificially. The liability therefore had to be worked out as a whole. On the appellant's own calculation, the duty actually payable under the relevant invoice was lower than the amount already paid, and the difference had to be adopted while accounting for the amount paid on the returned consignment.

Conclusion: The duty demand was required to be reduced and the adjustment claimed by the appellant was accepted.

Issue (ii): Whether penalty was warranted in the facts of the case.

Analysis: The appellant had approached the jurisdictional authority before clearance seeking permission, but the reply came only after a delay, and the goods were cleared in the meantime. In view of these circumstances, a lenient approach was justified on penalty.

Conclusion: The penalty was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessee obtained reduction of the duty demand with complete relief from penalty.

Ratio Decidendi: Where duty demand covers multiple clearances, the appellate forum may determine the liability holistically and allow appropriate adjustment of duty already paid; penalty may be waived where the assessee acted after seeking permission and the delay lay with the department.

---