Appellant not liable for duty, reduced penalty imposed for delay.

The Tribunal found the appellant not liable for duty under Section 112 of the Act due to the Revenue's contributory negligence and the appellant's right to relinquish under amended Section 68. However, a reduced penalty of Rs. 1 Lakh was imposed for the appellant's delay in action. The appeal was allowed in part, confirming the reduced penalty.

---

---

Issues:
- Liability of the appellant for demand of duty, interest, and penalty under Section 112 of the Act.

Analysis:

The appellant, engaged in the manufacture of various products, imported wine and warehoused it. After the warehousing period expired, the goods became unfit for consumption, and the appellant relinquished its title. The Revenue demanded duty, interest, and penalty. The appellant argued that relinquishment before clearance absolves duty liability. The Revenue cited provisions stating expired goods are chargeable. The appellant appealed the demand, contesting the ruling in Kesoram Rayon case, claiming subsequent amendments to Section 68 support their right to relinquish. The appellant also referenced a Karnataka High Court case where the court ruled in favor of the importer relinquishing title before clearance. The appellant sought relief based on these arguments.

The Commissioner (Appeals) upheld the demand, relying on the Kesoram Rayon case. The appellant contended that subsequent amendments to Section 68 allowed them to relinquish title. The appellant cited the Karnataka High Court case where the court ruled in favor of the importer relinquishing title before clearance. The appellant sought relief based on these arguments.

The Tribunal noted the appellant's right to relinquish under amended Section 68 but found the appellant's delay in action contributed to the goods deteriorating. The Revenue's inaction in demanding duty promptly was also highlighted. The Tribunal held the appellant not liable for duty as no demand was made before relinquishment but imposed a reduced penalty for negligence. The appeal was allowed in part, confirming a reduced penalty of Rs. 1 Lakh.

In conclusion, the Tribunal found the appellant not liable for duty due to the Revenue's contributory negligence and the appellant's right to relinquish under amended Section 68. However, a reduced penalty was imposed for the appellant's delay in action. The appeal was allowed in part, confirming a reduced penalty of Rs. 1 Lakh.

---