9911796707
|
Home
Issues involved: Import of Second Hand Paper Machine under EPCG Scheme, confiscation of imported machinery, imposition of penalty under Section 111(o) of the Customs Act, interpretation of exemption Notification No. 111/95-Cus., failure to meet export obligations, legality of penalties imposed.
In the present case, M/s. Oswal Paper & Allied Indus. imported a Second Hand Paper Machine in 1996 under the EPCG Scheme but failed to set up the manufacturing plant fully or export any goods, leading to Customs authorities confiscating the machinery and imposing penalties on the appellants. The issue revolved around whether the failure to meet export conditions warranted confiscation and penalties under Section 111(o) of the Customs Act. The appellants argued that under exemption Notification No. 111/95-Cus., the requirement upon failure to carry out export was to pay the full customs duty on the imported goods along with interest, with no provision for penalties. They contended that penalties were not legally justified and should be set aside. On the other hand, the JCDR contended that since the import was subject to export conditions and the obligations were not fulfilled, confiscation and penalties were warranted. However, the Tribunal analyzed the situation and found that the confiscation under Section 111 of the Customs Act, which pertains to improperly imported goods, was not applicable in this case as the import was made under a Govt. Sponsored Scheme to promote exports and there was no impropriety at the time of import. The Tribunal highlighted that the consequences of failing to meet export obligations were clearly outlined in the exemption notification itself, specifying the duties and interest payable in such instances. The notification was deemed a self-contained code, outlining benefits, obligations, and consequences. Therefore, the Tribunal concluded that no action outside the notification was warranted in this scenario, as it was a case of business failure rather than deliberate misconduct, leading to a financial loss rather than penalties. Ultimately, the Tribunal set aside the confiscation and imposition of penalties, allowing the appeals in favor of the appellants. The decision emphasized the legal position established by the exemption notification and the absence of grounds for confiscation and penalties in this particular case.
|
