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2019 (5) TMI 1034 - AT - CustomsConcessional rate of customs duty - Original Equipment (OE) parts - Notification No. 222/87-Cus dated 01.03.1987, 146/92-Cus dated 26.03.1992 and 72/93 dated 28.02.1993 - benefit of notification in respect of those parts which the appellant, after import, diverted to their spare parts division. HELD THAT:- Having imported the parts for the specified end-use, assessee has, thereafter, diverted them for some other use. Clearly, such diversions are not covered by the exemption notification. There is no scope for such diversion or even of loaning of the goods for some other purpose with the understanding that a corresponding quantity of the goods will be returned after some time. Therefore, as far as the exemption notification is concerned, they are NOT entitled to the benefit of exemption notification on such quantity of the goods as were diverted from OE to their spare parts division. The appellant’s contention that they were not the manufacturers during the relevant period who had imported the goods but had taken over the firm subsequently also does not carry their case any further. Once they have taken over the unit from the previous owners, they necessarily take on all the assets and liabilities including contingent liabilities of the unit. Therefore, they are fully liable to pay differential duty. Demand u/s 28B - HELD THAT:- The demand is based on the presumption that the appellant has collected some amount as representing customs duty by incorporating such amount in their cost calculations. Clearly, there is no evidence that the customer was charged some amount as representing customs duty. Section 28B does not provide for recovery of any amount included in the cost calculation as element of Customs Duty. Therefore, the demand on this count is not sustainable. Confiscation - redemption fine - penalty - HELD THAT:- A small quantity of the goods valued at ₹ 2,10,000/- were confiscated by the impugned order under Sec.111(o) of the Customs Act for violation of the conditions of the customs notification. An option to redeem the same has been given under Sec.125 by paying redemption fine of ₹ 25,000/- only. There is no reason to interfere with either confiscation or the reasonable amount of fine imposed for redemption of the goods on this count. In the impugned order a penalty of ₹ 40 lakhs has been imposed under Sec.112 (a) & (b) of the Customs Act upon the appellant for noncompliance of the conditions of the customs notification and clandestine clearance of OE parts to their spare parts division - penalty imposed on the appellant under Sec.112 (a) & (b) for non-compliance of the customs notification and clandestine removal of parts reduced. Appeal allowed in part.
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