2001 (9) TMI 375 - AT - Customs

Tribunal Upholds Benefit Denial for Imported Garlic Sales in Tax-Free Area

The Tribunal upheld the denial of benefit under Notification No. 56/98-Cus for imported garlic due to sales in a tax-free area. Penalties under Section ... Exemption - Special Additional Duty of Customs SAD - Import - Penalty Issues Involved: The judgment involves the issues of whether the benefit of Notification No. 56/98-Cus., dated 1-8-1998 is available for imported Garlic and whether penalty under Section 114A of the Customs Act is applicable.Details of the Judgment:Issue 1: Benefit of Notification No. 56/98-CusThe Appellant imported garlic from Pakistan and claimed exemption from Special Additional Duty of Customs under Notification No. 56/98. The Commissioner disallowed the exemption stating that no evidence was provided to show payment of required taxes. The Appellant argued that the benefit of the Notification should be available unless goods are sold where no tax is chargeable. The Tribunal held that the benefit was correctly denied as the garlic was sold in an area without sales tax, thus upholding the duty against the Appellant.Issue 2: Imposition of PenaltyThe Appellant contended that no penalty should be imposed under Section 114A of the Act, citing a Delhi High Court decision. They argued that the penalty provisions cannot be applied to levy penalty under the Customs Tariff Act. The Tribunal agreed, citing the Delhi High Court's interpretation that certain provisions do not create a charge in the nature of a penalty. Consequently, the penalties imposed were set aside, and the appeal was partly allowed.This judgment clarifies the conditions for availing benefits under Notification No. 56/98-Cus and the applicability of penalties under Section 114A of the Customs Act, providing insights into the interpretation of fiscal provisions and penalty imposition in customs cases.