Navayuga Engineering Co. Ltd. Vs Union of India & Anr. (Supreme Court of India)
Supreme Court held that owner of the goods has liability to pay customs duty and interest even after confiscated goods are redeemed after payment of fine and other charges under section 125 of the Customs Act.
Facts- The appellant availed the benefit of exemption from payment of customs duty under a notification dated 01.03.2002, as per which certain self-propelled hydraulic piling rigs were to be utilised exclusively for the construction of roads, bridges etc. for NHAI and PWD. When investigations revealed that the appellant has violated the import conditions, even before a show-cause notice was issued, the appellant deposited Rs.16,29,22,282/- and interest of Rs. 1,84,39,696/- between May, 2007 to August, 2007. Thereafter, a show-cause notice was issued on 23.0 1.2008 proposing confiscation u/s. 111(o) with respect to goods that were valued at Rs. 48.55 crores involving duty liability of Rs. 17,37,57,039/- u/s. 28, interest u/s. 28AB and penalties u/s 112(a) and (b) and 114A of the Act.
In the matter, hon’ble HC held that interest can be levied only when there is a substantive provision enabling it, section 125 has no such enabling provision, not even the procedure to assess duty, therefore, assessment of duty must necessarily be done under Section 28 and iv) once Section 28 procedure is adopted, application of Section 28AB is inevitable.
