2026 (4) TMI 1682

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....1962 [the Customs Act] on the demand of Integrated Goods and Service Tax [IGST] that was deposited by the appellant and whether the goods can be confiscated and in lieu of such confiscation, redemption fine can be imposed under section 125 of the Customs Act and penalty can be imposed under section 112(a) of the Customs Act. 2. This issue was examined by the Bombay High Court in A.R. Sulphonates Private Limited vs. Union of India [2025 (4) TMI 578 - Bombay High Court] and it was held that in view of the judgment of Supreme Court in Mahindra & Mahindra Ltd. (Automotive Sector) vs. Union of India [2022 (10) TMI 212 - Bombay High Court] no interest could be charged on the IGST payment nor penalty or redemption fine could be imposed. This is....

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.... 3 (12) of the Tariff Act. The provisions under consideration before this Court in the case of Mahindra & Mahindra Limited (supra) were Sections 3 (6) and 3A (4) of the Tariff Act. In Mahindra & Mahindra Limited (supra), this Court interpreted the provisions of Sections 3 (6) and 3 A(4) of the Tariff Act, which are pari materia to the unamended Section 3 (12) of the Tariff Act, which is in consideration in the present case. On interpreting Sections 3 (6) and 3A (4) of the Tariff Act, this Court held that when no specific reference was made to interest and penalties in the said provisions, imposing interest and penalty would be without the authority of law. In these circumstances, in our view, the ratio of the decision in the case of Mahindr....

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....took the same view and the relevant observation is: "11. From the above, it clearly transpires that the amended provisions of sub-section (12) of Section 3 of the Customs Tariff Act, 1975, which enable imposition of interest, penalties etc. on the IGST levied in terms of sub-section (7) of Section 3 ibid, shall come into force w.e.f. 16.08.2024 and shall not be applicable during the disputed period in the present case i.e., 13.10.2017 to 09.01.2019, which is prior to the above said amendment. Therefore, we are of the considered view that levy of interest, redemption fine and penalty on the appellants in the present case of demand of IGST is not legally sustainable. Thus, we are of the view, that the Impugned order in totality is li....