Customs reassessment barred after clearance, and absence of suppression defeats extended limitation and penal consequences.

Clearance of imported capital goods to the DTA was treated as permissible where the Development Commissioner's communication did not refuse permission and allowed sale after payment of applicable duties and compliance with customs procedure. The note further indicates that duty should be worked out on depreciated value rather than declared transaction value; once the proper officer had assessed and allowed clearance on the declared value, any later demand amounted to reopening the assessment without statutory review. In the absence of misdeclaration or suppression, the extended limitation, confiscation, penalty and interest were not sustainable, and the customs demand was set aside.

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Issues: (i) whether clearance of imported capital goods to the domestic tariff area was impermissible for want of Development Commissioner's permission, and (ii) whether duty was payable on the depreciated value or transaction value, with consequential liability to differential duty, confiscation, penalty and extended limitation.

Issue (i): whether clearance of imported capital goods to the domestic tariff area was impermissible for want of Development Commissioner's permission

Analysis: The communication from the Development Commissioner showed that the request to sell one machine could not be considered as a conversion under the EPCG scheme, but the goods could be sold in the DTA after payment of applicable duties and compliance with customs procedures. That communication negatived the finding that clearance to DTA was refused or that no permission at all existed.

Conclusion: The clearance to DTA was not vitiated on the ground of absence or refusal of permission; the finding against the assessee was unsustainable.

Issue (ii): whether duty was payable on the depreciated value or transaction value, with consequential liability to differential duty, confiscation, penalty and extended limitation

Analysis: The clarification issued by the DGFT indicated concessional duty treatment, but the duty ought to have been worked out on the depreciated value of the machinery. Since the proper officer had assessed and permitted clearance on the declared transaction value, the subsequent demand amounted to re-assessment without resort to the statutory review mechanism under Section 129D of the Customs Act, 1962. In these circumstances, no misdeclaration or suppression could be attributed to justify extended limitation or the allied penal consequences.

Conclusion: The duty demand, confiscation, interest, penalty and invocation of extended period were not sustainable.

Final Conclusion: The appeal succeeded and the impugned order was set aside, leaving the assessee free from the confirmed customs demand and penalties.

Ratio Decidendi: Where the customs assessment has been made and clearance allowed by the proper officer, the demand cannot be re-opened without the statutory review process, and absence of suppression defeats invocation of the extended period and penal consequences.

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