Tribunal Upholds Duty Liability & Confiscation, Penalties Imposed

The Tribunal confirmed duty liability, confiscated goods valued at Rs. 87,83,485, and imposed penalties under section 114A of the Customs Act, 1962, due to the failure to install capital goods at the designated address under the EPCG scheme. The appellant's argument that confiscation should not occur when full duty is paid was rejected. The breach of conditions led to the confirmation of duty liability, confiscation, and penalties. The appeal of M/s Prakash Roadlines Corporation Pvt Ltd was dismissed, while the appeal of the Director was allowed due to lack of evidence of deliberate wrongdoing.

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Issues:
Proceedings against import of capital goods under EPCG scheme - Eligibility for exemption under notification no. 97/2004-Cus - Confiscation of goods - Imposition of penalty under Customs Act, 1962.

Analysis:
The appeals were filed against the proceedings initiated regarding the import of capital goods valued at Rs. 87,83,485 under the EPCG scheme. The impugned order held that the goods were not eligible for exemption under notification no. 97/2004-Cus as they were not installed at the designated address but at a different location. Consequently, a differential duty liability of Rs. 22,71,520 was confirmed, and the goods were confiscated, with an option for redemption by paying a fine of Rs. 15,00,000. Additionally, penalties were imposed on the appellant and the Director under section 114A of the Customs Act, 1962, leading to the present appeals.

The appellant contended that the demand for duty should not have been enforced through section 28 of the Customs Act, 1962, as the bond was executed in compliance with the exemption notification. The appellant relied on previous Tribunal decisions to support their argument that confiscation is not sustainable when full duty is demanded. However, the Authorized Representative emphasized that failure to install the goods at the designated premises renders the appellant liable for adverse consequences as per the conditions of the notification.

The Tribunal found that previous decisions related to failure in fulfilling export obligations did not apply to the present case, where the breach of condition led to confiscation. The utilization of goods at a different location without regularization constituted a breach of eligibility for exemption, leading to the confirmation of duty liability, confiscation of goods, and imposition of penalties. The penalty imposed on the Director was set aside due to lack of evidence of deliberate wrongdoing.

In conclusion, the appeal of M/s Prakash Roadlines Corporation Pvt Ltd was dismissed, while the appeal of the Director was allowed. The decision was pronounced in court on 07/05/2019.

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