TaxTMI 
TaxTMI 
2025 (10) TMI 1200
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....ariff Act, 1975, was liable to discharged thereon. The scheme of 'advance authorization' was intended to provide the exemption thereon only to the extent that the imported goods be used in the production of goods for export; stemming therefrom demand of differential duty, under section 28 of Customs Act, 1962 along with interest thereon under section 28AA of Customs Act, 1962, was proposed for recovery by notice [show cause notice dated 18th December 2022] along with penal consequence of section 114A of Customs Act, 1962 in addition to proposal for confiscation under section 111 (o) of Customs Act, 1962. 2. Admittedly, the exports were undertaken by deployment of goods other than those imported without payment of duty. The records show that the appellant herein had discharged 'integrated tax' of Rs. 6,84,60,401 along with interest thereon of Rs. 4,94,39,247 on 7th July 2023 despite which the show cause notice was adjudicated by Commissioner of Customs (NS-III) vide its order [order-in-original no. 186/2024-25/Commr/NS-III/CAC/JNCH dated 15th October 2024] and which, in addition to appropriation of 'integrated tax' and interest towards the confirmation of proposed recovery, also ....
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..... The issue on imposing Interest, Redemption Fine and Penalty is no longer ResIntegra. 5.25 We also note that adjudicating authority has relied upon a few decisions in the impugned orders, which are on different facts and applicable in such facts. The facts and issue in the present cases are not identical to those cases. Therefore, the ratio of the decision is not directly applicable in the present case.' 6. The Hon'ble High Court of Bombay, in re AR Sulphonates Private Ltd, held that '60. In Mahindra & Mahindra Limited (supra), this Court, after going through the provisions of Section 3 (6) of the Tariff Act and Section 3 A (4) of the Tariff Act as applicable at the relevant time, held that no specific reference was made to interest and penalties in Sections 3 (6) and 3A (4) of the Tariff Act, which are substantive provisions and, therefore, imposing interest and penalty would be without the authority of law. In the present case, the levy of IGST is under Section 3 (7) of the Tariff Act, and Section 3 (12) of the Tariff Act which is applicable to the said levy is pari materia to Sections 3 (6) and 3A (4) of the Tariff Act as referred to in the case of Mahi....
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....hows that the Respondent also believed that the Judgement of this Court in Mahindra & Mahindra Limited (supra) had a direct bearing on the facts of the present case. Accordingly, once the Review Petition was dismissed by the Hon'ble Supreme Court in the case of Mahindra & Mahindra Limited (supra), the Respondents ought to have followed the Judgement of this Court in the case of Mahindra & Mahindra Limited (supra). In this regard, the reliance placed on the Judgement of this Court in Shreenathji Logistics (supra) is well founded. In this case, the Petitioner therein was seeking quashing of the impugned show cause notice dated 19th October, 2012 primarily on the ground that there had been an inordinate delay in adjudicating the show cause notice. It was the case of the Respondents therein that, since there was a matter where an identical issue was held against the Respondents by the CESTAT, Bombay, and the Respondent therein had preferred an Appeal in this Court, the show cause notice was transferred to the Call Book. On these facts, this Court held as under:- "5. Moreover, it is Respondents own case in the Affidavit-in-Reply that the issue in the show cause notice issue....
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.... non-levy, shortlevy, refunds, exemptions, interest, recovery, appeals, offences and penalties shall, as far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to duties leviable under that Act or all rules or regulations made thereunder, as the case may be." 67. In our view, the amended Section 3 (12) of the Tariff Act is prospective in nature and would apply only with effect from 16th August, 2024. 68. In our aforesaid view, we are supported by the decision of the Hon'ble Supreme Court in Orient Fabrics Limited (supra). Paragraphs 2 to 8 and 19 to 21 of Orient Fabrics (supra) read as under:- 2. The respondents herein carry on business of manufacture of man made fabrics. They have alleged to have misdisclosed the composition of certain sorts of fabrics. They were further alleged to have under valued goods by not paying duty on to the amount realised through debit notes. The collector, by his order dated 17th November, 1987, confirmed the levy of duty, amounting to Rs. 1,19,453,59. The Collector held that 35 bales of Fabric of Sort Nos. 1200 and 1300 are liable to be confiscated, bu....
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....f the Constitution provides that no tax shall be levied or collected except by authortity of law. The authority has to be specific and explicit and expressly provided. The Act created liability for additional duty for excise, but created no liability for any penalty. That being so, the confiscation proceedings against the respondents were unwarranted and without authority of law. 7. The Parliament by reason of Section 63(a) of the Finance Act, 1994 (Act No. 32 of 1994) substituted sub-section (3) of Section 3 of the said Act, which now reads as under: "3. Levy and collection of Additional Duties. - (1) (2) (3) The provisions of the (Central Excise Act, 1944) (1 of 1944), and the rules made thereunder, including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to the levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1)." 8. A comparison of the amended provisions with the unamended ones would clearly demonstrate that the words 'offences and pe....
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....sessment group at the POI with relevant details for purposes of payment of the tax and cess along with applicable interest." 72. In our view, for all the reasons stated herein above, the said Circular, to the extent that it seeks to recover interest, is bad in law. 73. As far as redemption fine imposed by the impugned Order is concerned, the same is demanded in lieu of confiscation of goods under Section 111(o) of the Customs Act. As per Section 111(o) of the Customs Act, the goods shall be liable for confiscation in the event the condition subject to which the goods are exempted from duty is not observed. As already held by us on the basis of the Judgement of the Hon'ble Supreme Court in the case of Orient Fabrics Limited (supra), Section 3 (12) of the Tariff Act, after its amendment by Finance (No.2) Act, 2024, dated 16th August, 2024, makes applicable the provisions relating to interest, offences and penalties of the Customs Act to the Tariff Act. As already held by us, Section 3 (12) of the Tariff Act, as amended, is applicable only after 16th August,2024 and is not applicable to the present case. Accordingly, in the present case, no confiscation could hav....