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2019 (8) TMI 336 - AT - CustomsProject imports - Levy of interest for duty foregone - failure to fulfil the export obligation - classification of imported machinery - whether classified under heading 9801 of First Schedule to Customs Tariff Act, 1975 or otherwise - HELD THAT:- It cannot be disputed that the EXIM policy pertaining to the scheme did provide for furnishing of an undertaking on the part of the importer/licensee to commit themselves to payment of interest in addition to the duty foregone at the time of import in the event of failure to fulfil the obligation - The divergence between the notification and the Policy on the consequences of failure to fulfil the export obligation was held to favour the implementation of the former but such is not the issue in the present circumstances owing to there being no incongruity. Confiscation of goods - HELD THAT:- A plethora of decisions of the Tribunal have held that the notifications issued in pursuance of the EXIM Policy, having provided for the alternative of payment of duty in the event of failure to fulfil the export obligation, renders the discharge of either of these option to be sufficient compliance with the condition to be fulfilled in the relevant notification issued under Customs Act, 1962, thus eliminating the scope for invoking section 111(o) of Customs Act, 1962 to confiscate the imported goods. Section 111(o) of Customs Act, 1962 empowers confiscation for non-fulfilment of ‘post-importation conditions’ which have not been regularised by the appropriate authority - With the recovery of duty, the requirement to comply with the ‘post-importation condition’ does not exist. Consequently, the imports stand regularised and section 111(o) of Customs Act, 1962 becomes inapplicable. With negation of section 111(o) of Customs Act, 1962, the imposition of penalty is not sustainable - Confiscation and penalty set aside. The recovery of differential duty and charging of interest in the impugned order are sustained and the order modified to set aside the confiscation and penalty - Appeal allowed in part.
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