Finality of exemption assessment and absence of suppression defeated confiscation, redemption fine, and penalty in customs proceedings.

Imported and indigenous goods were examined and cleared through the prescribed procedure with departmental knowledge, including STPI approval and CT-3 certificates, so the exemption assessments attained finality when not challenged by Revenue. On that basis, the goods were not treated as liable to confiscation under Section 111(o) of the Customs Act, 1962. Voluntary payment of duty and interest before the show cause notice, together with the absence of suppression or mala fide intent, also weighed against penalty and redemption fine. Revenue's challenge to the Commissioner's refusal to impose confiscation, redemption fine, and penalty failed.

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Issues: Whether the imported and indigenous goods were liable to confiscation and penalty for alleged wrongful availment of exemption benefits, and whether the Revenue was entitled to interference with the Commissioner's refusal to impose redemption fine and penalty.

Analysis: The goods were imported and procured with departmental knowledge and approval through the prescribed procedure. The competent authorities had examined and assessed the goods, STPI approval had been granted, and CT-3 certificates had been issued for the indigenous goods. The assessment of the bills of entry granting exemption benefit had attained finality as the Revenue did not challenge the assessment. In these circumstances, the goods were not treated as liable to confiscation under Section 111(o) of the Customs Act, 1962. The voluntary payment of duty and interest before the show cause notice, coupled with the absence of suppression or mala fide intention, also weighed against imposition of penalty and redemption fine.

Conclusion: The Revenue's challenge to the non-imposition of confiscation, redemption fine, and penalty failed, and the appeal was dismissed.

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