Court Upholds Duty Imposition on Company for Customs Violation

The court upheld the imposition of penalty and duty liability on a petitioner company for failing to meet post-importation conditions for customs duty exemption under Notification 64/88-Cus. The petitioner's application under the Kar Vivad Samadhan Scheme was rejected due to procedural grounds, leading to an adjudication order by the Commissioner. Ultimately, the court directed the petitioner to pay 50% of the duty amount within two weeks, resolving the dispute and closing the case without costs.

---

---

Issues:
1. Customs duty exemption under Notification 64/88-Cus.
2. Alleged violation of post importation conditions under CN64/88.
3. Rejection of application under Kar Vivad Samadhan Scheme.
4. Adjudication order and imposition of penalty.

Customs Duty Exemption:
The petitioner company imported a whole body scanner with standard accessories, claiming customs duty exemption under Notification 64/88-Cus. However, the exemption was subject to certification by the Ministry of Health and Family Welfare, which the petitioner did not have. As a result, provisional assessment was opted for by the petitioner.

Violation of Post Importation Conditions:
The respondent issued a show cause notice alleging that the petitioner did not meet the conditions of the exemption, as they did not provide treatment to the required percentage of patients as per the notification. The notice proposed confiscation of goods and imposition of a penalty, with a duty liability of Rs. 20,29,665. The Directorate General of Anti-Evasion Zonal Unit submitted a report stating that the establishment was only a diagnostic center, not meeting the post importation conditions.

Rejection of Kar Vivad Samadhan Scheme Application:
The petitioner applied under the Kar Vivad Samadhan Scheme for dispute resolution, but the application was rejected by the designated authority. The rejection was based on the grounds that duty demand was not raised in the show cause notice, and the redemption fine and penalty were not quantified. The department proceeded with the adjudication order following principles of natural justice.

Adjudication Order and Penalty Imposition:
The Commissioner adjudicated the case, imposing a redemption fine, penalty, and demanding duty under the Customs Act, 1962. Despite an Order-in-Original being passed, the petitioner opted for the Kar Vivad Samadhan Scheme. The petitioner requested the court to direct payment of 50% of the duty amount under the scheme, which was agreed upon by both parties. The court directed the petitioner to pay Rs. 10,15,000 as the duty amount within two weeks, closing the writ petition without costs.

This judgment addresses the issues of customs duty exemption, violation of post importation conditions, rejection of the Kar Vivad Samadhan Scheme application, and the adjudication order with penalty imposition, providing a resolution through payment under the scheme.

---