2017 (5) TMI 930 - AT - Customs

Tribunal Upholds Duty Demand, Cancels Confiscation: Importance of Compliance with Customs Laws

The Tribunal upheld the demand for additional duty and interest under Notification 27/2002-Cus for failure to re-export within six months but within one ... Benefit of N/N. 27/2002-Cus - benefit of concessional rate of duty at 15% on export of machinery - the case against the appellant was that they exported machinery beyond six months as required by notification and hence they are not entitled to concessional rate of duty - the case of appellant is that they sought time extension from Department for export of machinery - recovery of 85% of duty alongwith interest and penalty - Held that: - the extension of time sought for 10 days for re-export of the machinery which was rejected by the department - the notification clearly states that the imported goods are required to discharge fifteen percent if importer undertakes to re-export the goods within six months from the date of import and in a case not able to do so, he has to pay further fifteen percent of the duty after six months but before the expiry of one year after the import of the goods - In any case the goods have been re-exported after six months but before one year, the clauses of the notification are very clear and the appellant is required to discharge additional fifteen percent of the duty along with interest - To that extent, the adjudicating authority was correct in confirming the demands raised for additional fifteen percent of the duty and the interest thereof. Confiscation of goods - Held that: - Since the imported goods are re-exported within one year of imported goods being cleared there is no violation of the condition of notification 27/2002-Cus. Hence the confiscation ordered by the adjudicating authority is not correct and illegal and needs to be set aside - penalties also set aside. The demand of the differential customs duty and the interest thereof is upheld and the confiscation ordered and penalties imposed by the adjudicating authority are set aside - decided partly in favor of appellant. Issues:Adherence to conditions of Notification 27/2002-Cus for re-export of imported goods, Confiscation of goods under Section 111(o) of the Customs Act, 1962, Imposition of penalties under Section 112 of the Customs Act, 1962.Adherence to Notification 27/2002-Cus:The case involved imported goods by M/s Expotec International Ltd. under Notification 27/2002-Cus, claiming exemption if re-exported within six months to one year. The appellant failed to re-export within six months but did so within one year. The Tribunal upheld the demand for additional duty and interest as per the notification's terms, rejecting the appellant's argument for extension of time.Confiscation of Goods:The adjudicating authority ordered confiscation under Section 111(o) of the Customs Act, 1962. However, the Tribunal found the confiscation unjust as the goods were re-exported within the stipulated one-year period, complying with the notification. Consequently, the confiscation was set aside, leading to the annulment of penalties imposed under Section 112.Imposition of Penalties:Since the confiscation was set aside due to compliance with re-export conditions, the penalties imposed on both appellants were also annulled. The Tribunal upheld the demand for differential customs duty and interest while overturning the confiscation and penalties, resulting in a mixed outcome for the parties involved.This judgment highlights the importance of strict adherence to notification conditions for duty exemptions and the legal implications of non-compliance with such provisions. The Tribunal's detailed analysis and decision provide clarity on the application of relevant laws and notifications in customs cases, ensuring fair and just outcomes based on statutory requirements and factual circumstances.