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of <h1>Appeal partly granted, duty upheld. Orders for confiscation & penalty set aside. Compliance, fairness emphasized.</h1> <h3>M/s. Air India Ltd. Versus Commissioner of Customs (ACC & Import), Mumbai</h3> M/s. Air India Ltd. Versus Commissioner of Customs (ACC & Import), Mumbai - TMI Issues Involved:1. Demand of Customs Duty2. Demand of Interest3. Confiscation of Excess Goods4. Imposition of Redemption Fine5. Imposition of Penalty6. Limitation Period for DemandDetailed Analysis:1. Demand of Customs Duty:The Commissioner confirmed the demand of Customs duty amounting to Rs. 1,47,94,926 under Section 28 of the Customs Act, 1962. The imports were self-assessed by the appellants, who availed the benefit of exemption under Notification No. 21/2002-Cus, subject to condition 102. During an Onsite Post Clearance Audit (OSPCA), discrepancies were found in the inventory, leading to a show cause notice. The Tribunal upheld the demand, emphasizing that the appellants failed to satisfy post-importation conditions, thus making the goods liable for duty.2. Demand of Interest:The Commissioner also confirmed the demand of interest on the Customs duties under Section 28AB of the Customs Act, 1962. The Tribunal upheld this demand, stating that interest is for the delay in payment of duty from the due date. This view was supported by precedents such as P V Vikhe Patil SSK and Kanhai Ram Thakedar.3. Confiscation of Excess Goods:The Commissioner ordered the confiscation of excess goods valued at Rs. 3,08,18,771.47 under Sections 111(l), 111(m), and 111(o) of the Customs Act, 1962, with an option to redeem on payment of Rs. 50,00,000 as Redemption Fine. The Tribunal, however, set aside the order of confiscation and the redemption fine, citing the decision in Shiv Kripa Ispat Pvt Ltd, which held that goods not seized and released provisionally cannot be confiscated.4. Imposition of Redemption Fine:The Tribunal set aside the redemption fine imposed by the Commissioner, aligning with the precedent that goods not seized and released provisionally cannot be subjected to redemption fine.5. Imposition of Penalty:The Commissioner imposed a penalty of Rs. 25,00,000 under Section 112(a) of the Customs Act, 1962. The Tribunal set aside this penalty, considering the enormity of the inventory managed by the appellant and the fact that it is a Public Sector Undertaking. The Tribunal found no deliberate act to evade duty and cited Hindustan Steel, which states that penalty should not be imposed unless there is a deliberate defiance of law.6. Limitation Period for Demand:The appellants argued that the demand was barred by limitation as the show cause notice was issued for imports made during 2010-12 on 21.12.2014. The Tribunal did not explicitly address this issue in the final decision, focusing instead on the merits of the case and the compliance with post-importation conditions.Conclusion:The appeal was partly allowed. The Tribunal upheld the demand for duty and interest but set aside the orders for confiscation, redemption fine, and penalty. The decision emphasized the importance of adhering to post-importation conditions and proper inventory management, while also considering the procedural fairness in the imposition of penalties and fines.
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