Issues: Whether immediate suspension of Customs Brokers' licences under Regulation 16(1) was valid where there were substantial delays in investigation and/or in acting on the offence reports.

Analysis: Regulation 16(1) confers an exceptional preventive power, exercisable only where immediate action is necessary; pendency or contemplation of an enquiry alone is insufficient. "Immediate" does not mean instantaneous, but requires reasonable promptness after sufficient material becomes available to the licensing authority. Circular No. 9/2010-Customs remains binding and its timelines guide the assessment of whether immediate action was genuinely necessary, though a reasonable deviation may be justified by properly explained exceptional circumstances. Reasons demonstrating the necessity for immediate preventive action must be recorded. The substantial and unexplained delays in completing investigations and in issuing suspension orders after receipt of offence reports showed absence of the requisite immediacy.

Conclusion: The statutory requirement of immediate action under Regulation 16(1) was not satisfied, and the suspension orders and consequential continuation orders were legally unsustainable.

Issues: Whether an amendment to an exemption notification effective from 15.06.2026 could be relied upon to refuse consideration of provisional release of imported goods covered by bills of lading dated before that date.

Analysis: Section 110A of the Customs Act, 1962 governs provisional release. The bills of lading were dated 04.05.2026 and 11.05.2026, preceding the commencement of the amendment on 15.06.2026. In the absence of an express provision giving retrospective operation, the amended notification operates prospectively and cannot govern the imports in question. No distinguishing feature was shown from the earlier ruling concerning provisional release of similar goods.

Conclusion: The amendment could not be invoked to decline consideration of provisional release; the authorities must consider the request under Section 110A of the Customs Act, 1962 and release the goods provisionally upon compliance with conditions lawfully imposed.

Issues: Whether the application seeking recall of the ex parte order could be rejected for delay despite having been filed pursuant to liberty granted by the Adjudicating Authority.

Analysis: In the Section 47 proceedings, the factual position was identical to that addressed in the earlier order concerning another respondent. The earlier application had sought recall of a subsequent order under a misconception, whereas the relevant ex parte order was passed earlier. After the error was identified, liberty was granted to seek recall of the earlier order, and the fresh application was filed pursuant to that liberty. Treating the application as delayed in these circumstances was a hypertechnical approach, particularly when the underlying proceeding remained pending.

Conclusion: The delay-based rejection was set aside; the ex parte order was recalled insofar as it concerned the appellant, whose reply was directed to be taken on record and who was permitted to participate in the further proceedings.

Issues: Whether CENVAT credit could be denied on the ground of raw-material shortages where the stock was in work-in-progress and work log sheets had been produced.

Analysis: The explanation that the stock was lying in work-in-progress, supported by the work log sheets, was not considered by the authorities. No investigation was undertaken into that explanation. Mere shortages of raw materials could not establish that the goods had not been received.

Conclusion: CENVAT credit could not be denied on the basis of the alleged shortages; the issue was decided in favour of the assessee.

Issues: Whether Cenvat credit on consumables used in the manufacture of job-worked goods cleared without payment of duty to the principal manufacturer is barred by Rule 6(2) of the Cenvat Credit Rules, 2004.

Analysis: Rule 6(2) applies where an assessee manufactures both dutiable and exempted goods without maintaining separate accounts for inputs or input services. Goods manufactured on job work, though cleared without payment of duty to the principal manufacturer, remain dutiable goods and cannot be treated as exempted goods merely because the job worker does not discharge duty at the time of clearance.

Conclusion: The appellant was entitled to Cenvat credit on consumables used for job-worked goods; the denial of credit under Rule 6(2) was unsustainable.

Issues: (i) Whether the advance-ruling application concerning the proposed imports was maintainable; (ii) Whether MILDS F SUOF Lens, Front End (M2FE), and MILDS F SUII Coupled units were eligible for exemption under Sl. No. 60 of Table II to Notification No. 45/2025-Customs dated 24.10.2025.

Issue (i): Whether the advance-ruling application concerning the proposed imports was maintainable.

Analysis: The applicant held a valid Importer-Exporter Code, the question concerned the applicability of an exemption notification to goods proposed to be imported, and no identical question was pending or had been decided in the applicant's case. The imports had not occurred and the prescribed fee had been paid.

Conclusion: The application was maintainable and admitted for a ruling.

Issue (ii): Whether MILDS F SUOF Lens, Front End (M2FE), and MILDS F SUII Coupled units were eligible for exemption under Sl. No. 60 of Table II to Notification No. 45/2025-Customs dated 24.10.2025.

Analysis: Sl. No. 60 is a functional and end-use based exemption covering parts, sub-assemblies and accessories for specified defence equipment, including aircraft, across any tariff chapter. Individual tariff classification does not determine eligibility, but a demonstrable nexus with the qualifying end-use aircraft and fulfilment of Condition No. 17 are necessary.

Analysis: The imported units are separately manufactured, prefabricated components engineered to form the missile-warning system, which is fitted as part of the electronic-warfare suite of military helicopters. They accordingly qualify as sub-assemblies and, alternatively, accessories for aircraft. The end-use documentation established the exclusive defence nexus, but could not substitute the certificate prescribed under Condition No. 17 for exemption at the time of import.

Conclusion: The goods qualify for the exemption under Sl. No. 60, subject to compliance with Condition No. 17 and verification at importation, in favour of the assessee.

Final Conclusion: The ruling confines notification coverage to the described goods; tariff classification and consignment-level certification and verification remain for assessment at the time of import.

Ratio Decidendi: A functional, end-use based customs exemption applies where imported components have a demonstrable nexus with the specified defence end-product, irrespective of their individual tariff headings, provided the notification's mandatory certification condition is fulfilled.

Issues: (i) Whether a composite reverse-charge demand on overseas expenses, including foreign-bank charges and commission, could be sustained without establishing that the exporter was the recipient of the alleged taxable services; and (ii) Whether the extended period of limitation and equal penalty could be sustained.

Issue (i): Whether a composite reverse-charge demand on overseas expenses, including foreign-bank charges and commission, could be sustained without establishing that the exporter was the recipient of the alleged taxable services.

Analysis: Rule 2(1)(d)(i)(G) of the Service Tax Rules, 1994 and Section 68(2) of the Finance Act, 1994 place reverse charge mechanism liability upon the service recipient. The material did not establish privity of contract between the exporter and foreign banks, any direct charge by the foreign banks, or a service relationship under which the exporter received the alleged taxable service. For collection of export proceeds, the Indian bank was the service recipient of the foreign bank's services. The show-cause notice and the lower orders also failed to bifurcate the overseas commission from banking and financial service expenses, while treating the entire composite amount as foreign-bank services.

Conclusion: The exporter was not proved to be the service recipient for the disputed charges, and the undifferentiated composite reverse-charge demand was unsustainable, in favour of the assessee.

Issue (ii): Whether the extended period of limitation and equal penalty could be sustained.

Analysis: The demand arose from audit of the exporter's own records, with no evidence of mala fide intent or suppression of facts. Revenue neutrality also existed because any service tax paid would have been available as input tax credit. The conditions for invoking the extended period of limitation were therefore absent.

Conclusion: The extended period of limitation and the equal penalty were unsustainable, in favour of the assessee.

Final Conclusion: The confirmed service-tax, interest, and penalty liabilities lacked legal foundation.

Ratio Decidendi: Reverse charge mechanism liability for foreign-bank charges requires proof that the Indian exporter was the recipient of an identified taxable service under a privity of contract or equivalent service relationship; such recipient status cannot be presumed merely because charges are ultimately borne by the exporter.

Issues: (i) Whether a final assessment order that inadvertently omitted effect to DRP directions could be rectified under Section 154; (ii) Whether the Indian subsidiary constituted a permanent establishment of the assessee in India and whether business profits were attributable to it; (iii) Whether back-to-back reimbursements of expenses without mark-up were taxable as fees for included services; (iv) Whether the arm's length price of corporate guarantee commission could be fixed without evaluating the assessee's benchmarking.

Issue (i): Whether a final assessment order that inadvertently omitted effect to DRP directions could be rectified under Section 154.

Analysis: Section 144C(10) and Section 144C(13) require the Assessing Officer to comply with binding DRP directions while passing the final assessment order. Neither Section 144C nor Section 154 restricts rectification of a patent and obvious error in such an order. The directions had been reproduced in the assessment order, but their effect was inadvertently omitted from the computation; the error was therefore a mistake apparent on the face of the record. The rectification was also made within the limitation prescribed by Section 154(7).

Conclusion: Against the assessee: the final assessment order was validly rectified under Section 154 and was not rendered void for the inadvertent omission to implement the DRP directions.

Issue (ii): Whether the Indian subsidiary constituted a permanent establishment of the assessee in India and whether business profits were attributable to it.

Analysis: Under Article 5 of the India-USA Double Taxation Avoidance Agreement, the existence of a permanent establishment was not established on the facts. The issue had consistently been decided for the assessee in earlier assessment years on identical facts, and no distinguishing factual circumstance was identified for the relevant year. In the absence of a permanent establishment, no business profits could be attributed to India.

Conclusion: In favour of the assessee: the Indian subsidiary was not a permanent establishment, and the addition of business profits attributed to it was directed to be deleted.

Issue (iii): Whether back-to-back reimbursements of expenses without mark-up were taxable as fees for included services.

Analysis: The evidence and remand report established that the assessee acted only as an intermediary between the service providers and its Indian associated enterprise, receiving reimbursement equal to the amounts paid, without profit or mark-up. Further, Article 12(4)(b) of the India-USA Double Taxation Avoidance Agreement requires technical knowledge, skill, know-how, process, plan, or design to be made available so that the recipient can independently apply it. Neither the nature of qualifying technical or consultancy services nor satisfaction of the make available test was established.

Conclusion: In favour of the assessee: the reimbursements were not taxable as fees for included services, and the addition was directed to be deleted.

Issue (iv): Whether the arm's length price of corporate guarantee commission could be fixed without evaluating the assessee's benchmarking.

Analysis: The assessee had benchmarked the corporate-guarantee transaction in its transfer-pricing study, but the benchmarking was not evaluated. Fixing the commission rate on an estimated basis without examining the relevant facts and the assessee's benchmarking was not sustainable.

Conclusion: In favour of the assessee: the corporate-guarantee arm's length price issue was restored for fresh adjudication after examining the assessee's benchmarking.

Final Conclusion: The permanent-establishment and fees-for-included-services additions do not survive; the corporate-guarantee adjustment requires fresh determination, while the challenge to rectification of the assessment order fails.

Issues: (i) Whether scholarships remitted in India in Indian currency to Indian students pursuing education abroad constitute an application of income outside India or activity beyond the trust's charitable objects? (ii) Whether the CIT(E) may deny registration under section 12AB and approval under section 80G by examining alleged violations of sections 11(1)(c) and 13(1)(c)?

Issue (i): Whether scholarships remitted in India in Indian currency to Indian students pursuing education abroad constitute an application of income outside India or activity beyond the trust's charitable objects?

Analysis: Section 11(1)(c) concerns income applied for purposes outside India. The scholarships were paid through Indian banks in Indian currency to Indian students, with no payment remitted to a foreign university or institution. A student's subsequent use of the scholarship for education abroad does not convert the domestic disbursement into an overseas application of income. The educational scholarships fell within the stated charitable objects, had been accepted under earlier registrations, and no material showed that the activity was non-genuine or outside those objects.

Conclusion: Scholarships paid in India to Indian students for overseas education do not violate section 11(1)(c) and remain charitable educational activity within the trust's objects. The issue is decided in favour of the assessee.

Issue (ii): Whether the CIT(E) may deny registration under section 12AB and approval under section 80G by examining alleged violations of sections 11(1)(c) and 13(1)(c)?

Analysis: The inquiry at the registration stage is confined to the charitable objects, genuineness of activities, and compliance with laws material to achieving those objects. Questions concerning application or alleged misapplication of income, including benefits to specified persons under section 13(1)(c), concern computation of exemption and are to be examined in assessment proceedings. No material established that the trust's activities were non-genuine or that its objects were non-charitable. The prior grant of registration on the same objects and activities also supported continuity.

Conclusion: Alleged violations of sections 11(1)(c) and 13(1)(c) cannot be used at the registration stage to deny registration under section 12AB or consequential approval under section 80G. The issue is decided in favour of the assessee.

Final Conclusion: The refusal of charitable registration and consequential donor-benefit approval was unsustainable; registration and consequential approval are required to be granted.

Ratio Decidendi: At the registration stage, the authority's inquiry is confined to the charitable objects and genuineness of activities; domestic scholarship payments to Indian students do not become an application of income outside India merely because the students pursue education abroad.

Issues: Whether the detained personal jewellery could be returned to the petitioners for re-export to Saudi Arabia.

Analysis: The jewellery was stated to be personal jewellery intended to be taken back to Saudi Arabia and not sold in India. The order directed adjudication of a representation or application seeking its return, while contemplating a minor penalty for the customs infraction upon the petitioners' consent. No final adjudication on return of the jewellery was made.

Outcome: The petitioners were permitted to submit a representation or application for adjudication of return of the seized jewellery.

Outcome: The company appeal was allowed by consent and the impugned order was quashed.

Issues: Whether outstanding Central Sales Tax dues could be treated as secured debt, and the State Tax Department as a secured creditor, by reading Section 9(2) of the Central Sales Tax Act, 1956 with Section 48 of the Gujarat Value Added Tax Act, 2003.

Analysis: Section 9(2) of the Central Sales Tax Act, 1956 is a machinery provision enabling State authorities to assess, collect and recover Central Sales Tax by using the procedural machinery of the applicable State sales-tax law. It does not create a statutory first charge over the dealer's property or impliedly incorporate the substantive first charge under Section 48 of the Gujarat Value Added Tax Act, 2003. A security interest cannot arise merely from the recovery machinery under Section 9(2).

Analysis: The Explanation to Section 3(31) of the Insolvency and Bankruptcy Code, 2016 is clarificatory and operates retrospectively; it excludes a security interest created merely by operation of law unless it arises from an agreement or arrangement between parties. The absence of any contractual security interest independently precludes secured status for the Central Sales Tax claim.

Conclusion: The admitted Central Sales Tax dues cannot be treated as secured debt, and the State Tax Department cannot claim the status of a secured creditor or priority under Section 53(1)(b)(ii) of the Insolvency and Bankruptcy Code, 2016.

Outcome: Special leave petition dismissed; all relevant issues and contentions were left open for trial.

Issues: (i) Whether the service-tax demand based on the departmental computation of the assessee's sales turnover was sustainable; (ii) Whether the threshold exemption was available for the residual taxable-service receipts of Rs. 9,32,999.

Issue (i): Whether the service-tax demand based on the departmental computation of the assessee's sales turnover was sustainable.

Analysis: The acknowledged VAT audit report in Form E-704 recorded sales turnover of Rs. 1,16,70,673 and payment of VAT attributable to those transactions. The lower authorities adopted a substantially lower sales figure of Rs. 85,89,993 without referring to documentary material supporting that computation. The service-tax demand resulting from the assumed taxable-service component was therefore unsupported by adequate evidence.

Conclusion: The service-tax demand founded on the unsubstantiated turnover computation is unsustainable, in favour of the assessee.

Issue (ii): Whether the threshold exemption was available for the residual taxable-service receipts of Rs. 9,32,999.

Analysis: Notification No. 33/2012-S.T. dated 20.06.2012 exempted taxable services within the threshold limit of Rs. 10 lakh from service tax leviable under Section 66B of the Finance Act, 1994. The residual receipts identified as taxable-service income were Rs. 9,32,999 and fell within that limit.

Conclusion: The threshold exemption is available for the taxable-service receipts of Rs. 9,32,999, in favour of the assessee.

Final Conclusion: The adjudged service-tax liability lacks a sustainable basis, and no service tax is payable on the residual receipts within the notified threshold.

Issues: Whether the maximum packing speed of a pan masala packing machine could be reduced through alterations to the machine for determining duty liability when the same goods continued to be packed.

Analysis: The statutory scheme treats the number of packing machines and the maximum packing speed at which they can be operated as relevant factors for capacity determination, deemed production and duty. A fresh declaration may be filed upon subsequent changes, but the permissible changes do not authorise reduction of the maximum speed of a machine by alteration when packing the same goods at the same retail sale price. The records established that the machine had operated at 1000 pouches per minute and fell within the category of 751 pouches per minute and above; altered actual operating speed or a claimed reduction in speed could not displace that maximum-speed category.

Conclusion: The reduced speed declaration was not admissible. The machine was correctly classifiable in the category of 751 pouches per minute and above, with duty payable on that basis, against the assessee.

Issues: (i) Whether modifications and body-building undertaken on fully built motor vehicles amount to manufacture or result in excisable goods, and whether exemption under Notification No. 12/2012-CE dated 17.03.2012 is consequently available. (ii) Whether the extended limitation under Section 11A of the Central Excise Act, 1944 and penalty under Section 11AC of that Act are invocable. (iii) Whether individual penalty under Rule 26 of the Central Excise Rules, 2002 is sustainable.

Issue (i): Whether modifications and body-building undertaken on fully built motor vehicles amount to manufacture or result in excisable goods, and whether exemption under Notification No. 12/2012-CE dated 17.03.2012 is consequently available.

Analysis: Central excise duty is chargeable on goods in the form in which they are cleared. Modification of an already fully built vehicle or addition of value does not, by itself, establish manufacture. Section 2(f) of the Central Excise Act, 1944 and Chapter Note 5 of Chapter 87 of the First Schedule to the Central Excise Tariff Act, 1985 require a determination whether the processes undertaken constitute manufacture, including whether they amount to building a body on a chassis falling under heading 8706. Classification and exemption liability cannot be resolved without this foundational determination.

Conclusion: The question of manufacture or excisability and the consequential eligibility for exemption requires fresh determination.

Issue (ii): Whether the extended limitation under Section 11A of the Central Excise Act, 1944 and penalty under Section 11AC of that Act are invocable.

Analysis: The assessee was registered, regularly filed statutory returns, disclosed its clearances and exemption claim, and was subjected to departmental scrutiny and audits. Section 11A extended limitation and Section 11AC penalty require fraud, wilful misstatement, suppression, or contravention with intent to evade duty. Mere non-payment, a mistaken legal position, or a subsequent change in the departmental view does not establish a positive and deliberate act of suppression.

Conclusion: The extended period of limitation and penalty under Section 11AC are not invocable, in favour of the assessee; any duty determination is confined to the normal period of limitation.

Issue (iii): Whether individual penalty under Rule 26 of the Central Excise Rules, 2002 is sustainable.

Analysis: Personal penalty under Rule 26 requires material showing the requisite knowledge and involvement in dealing with goods liable to confiscation. In the absence of fraud, collusion, wilful suppression, misstatement, or intent to evade duty, the record does not establish the basis for personal penal liability.

Conclusion: The penalty under Rule 26 is unsustainable, in favour of the assessee.

Final Conclusion: Only a duty liability determined within the normal limitation period, after determining manufacture and exemption eligibility, may survive; the penal consequences founded on intentional evasion cannot be sustained on the present record.

Ratio Decidendi: Extended limitation and penalty for evasion apply only upon proof of a positive and deliberate act amounting to wilful suppression or other statutory deception with intent to evade duty.

Issues: Whether the order determining transfer-pricing matters was sustainable despite the absence of a personal hearing and adequate reasons.

Analysis: An order under Section 92CA(3) of the Income-tax Act, 1961 must reflect due consideration of the assessee's contentions and contain reasons supporting the determination. Although written replies had been considered, the impugned order did not record the contentions or reasons and did not show that a personal hearing had been afforded.

Conclusion: The impugned order could not be sustained and is required to be redetermined through a reasoned order after affording the assessee a personal hearing in accordance with law.

Issues: (i) Whether employee recoveries for subsidised mandatory canteen facilities amount to a taxable supply. (ii) Whether input tax credit on canteen services is available and, if so, to what extent.

Issue (i): Whether employee recoveries for subsidised mandatory canteen facilities amount to a taxable supply.

Analysis: Section 7 of the Central Goods and Services Tax Act, 2017 requires a supply for consideration in the course or furtherance of business. The canteen facilities at the factory and research facility were obligatory under Section 46 of the Factories Act, 1948, while the corporate-office canteen was obligatory under Section 23 of the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019. The facilities were governed by the employer's canteen policy and the employee deductions represented subsidised meal charges. Circular No. 172/04/2022-GST treats employment perquisites provided under the employer-employee arrangement as outside GST.

Conclusion: The recoveries from employees towards canteen facilities are not a supply and do not attract GST. The issue is decided in favour of the assessee.

Issue (ii): Whether input tax credit on canteen services is available and, if so, to what extent.

Analysis: The proviso to Section 17(5)(b) of the Central Goods and Services Tax Act, 2017, as clarified by Circular No. 172/04/2022-GST, applies to the whole of clause (b) and permits input tax credit where provision of the relevant facility is obligatory under law. Since the canteen facilities were statutorily mandatory, the blocked-credit restriction did not apply to the employer's cost. Credit attributable to the portion of canteen cost recovered from employees remains unavailable.

Conclusion: Input tax credit on canteen services is admissible only to the extent of the cost borne by the assessee; proportionate credit embedded in the amounts recovered from employees is disallowed. The issue is partly decided in favour of the assessee.

Final Conclusion: Statutorily mandated subsidised canteen facilities provided as part of the employment arrangement fall outside taxable supply, while the associated credit entitlement is confined to the employer-funded portion of the facility.

Ratio Decidendi: Where an employer provides a statutorily mandatory canteen under an employment arrangement, employee recoveries do not constitute taxable supply, and input tax credit is available only for the cost borne by the employer.

Issues: (i) Whether preferential-duty exemption could be denied by treating the certificates of origin as non-genuine without certificate-specific retroactive verification or supporting evidence; (ii) Whether confiscation and redemption fine could be sustained when the imported goods were unavailable for confiscation and had been cleared without a bond or undertaking.

Issue (i): Whether preferential-duty exemption could be denied by treating the certificates of origin as non-genuine without certificate-specific retroactive verification or supporting evidence.

Analysis: The Malaysian verification e-mail referred to a certificate number different from the appellant's certificate, and no enquiry or evidence was produced concerning the second Malaysian certificate. For the Thai imports, the retroactive-verification material did not concern the appellant's certificates. Verification findings concerning certificates of other importers could not be mechanically extended to the appellant's separately issued certificates. The material did not establish that the certificates furnished at import were invalid or non-genuine.

Conclusion: Denial of the exemption under Notification No. 46/2011-Cus. dated 01.06.2011, and the consequential differential duty, interest, and penalty under Section 114A of the Customs Act, 1962, were unsustainable, in favour of the assessee.

Issue (ii): Whether confiscation and redemption fine could be sustained when the imported goods were unavailable for confiscation and had been cleared without a bond or undertaking.

Analysis: The goods were admittedly unavailable for confiscation and were not released against a bond or undertaking. Redemption fine in lieu of confiscation is not imposable in those circumstances.

Conclusion: The confiscation and redemption fine were unsustainable and were set aside, in favour of the assessee.

Final Conclusion: The preferential tariff claims remained valid, and the consequential fiscal and confiscatory liabilities failed.

Ratio Decidendi: Preferential-duty exemption based on a certificate of origin cannot be denied without reliable, certificate-specific evidence establishing that the certificate is invalid or non-genuine.

Issues: (i) Eligibility of the imported electronic paver finishers for exemption under Notification No. 12/2012-Customs dated 17.03.2012; (ii) validity of invoking the extended period of limitation for recovery of duty; (iii) sustainability of personal penalty on the director under Section 112(a) of the Customs Act, 1962.

Issue (i): Eligibility of the imported electronic paver finishers for exemption under Notification No. 12/2012-Customs dated 17.03.2012.

Analysis: The notification extended exemption to an electronic paver finisher with sensor device for laying bituminous pavement of 7 metres and above. The proforma invoice did not disclose that accessories or bolt-on extensions were supplied with the machine. The imported machine, as verified, had a basic paving width capable of extension only up to 5 metres through its hydraulic system, while no additional bolt-on extension was connected. Exemption notifications require strict construction, and the claimant bears the burden of establishing compliance with the prescribed conditions. Optional external extensions could not be treated as enlarging the machine's capability for the exemption when the notification did not provide for such treatment.

Conclusion: The imported paver finishers were not eligible for the exemption. The finding is in favour of Revenue.

Issue (ii): Validity of invoking the extended period of limitation for recovery of duty.

Analysis: The bill of entry did not specifically disclose the machine's paving capability or the need for external additions to attain a greater paving width. This omission amounted to misdeclaration of material particulars relevant to the exemption claim.

Conclusion: Invocation of the extended period of limitation was valid. The finding is in favour of Revenue.

Issue (iii): Sustainability of personal penalty on the director under Section 112(a) of the Customs Act, 1962.

Analysis: Neither the allegations nor the adjudication identified a specific act or omission of the director that caused the misdeclaration. Individual culpability necessary for personal penalty was therefore not established.

Conclusion: The personal penalty imposed on the director was unsustainable and was deleted. The finding is in favour of the assessee.

Final Conclusion: The duty demand and allied consequences against the importing company remain enforceable, while the director incurs no personal penalty.

Ratio Decidendi: Eligibility under a strictly construed customs exemption depends on the capability and characteristics of the goods in their imported condition; optional external extensions cannot satisfy an unstated notification requirement.