A. R. Sulphonates Private Limited Vs Union of India (Bombay High Court)
Bombay High Court held that demand of interest, penalty and redemption fine from importer in lieu of payment of IGST leviable u/s. 3(7) of the Customs Tariff Act not justified since offences and penalties has been introduced in section 3(12) of Customs Tariff Act effective only from 16th August, 2024.
Facts- The present Petition is filed challenging the Order dated 1st August, 2024 passed by Respondent No.2 to the extent it seeks to demand interest, penalty and redemption fine from the Petitioner in lieu of payment of IGST leviable under Section 3(7) of the Customs Tariff Act, 1975. The Petitioner has also challenged Circular No.16/ 2023- Customs dated 7thJune, 2023 issued by the Central Board of Indirect Tax and Customs to the extent it purports to levy interest upon the IGST payment.
Read Interim SC Order: IGST on Advance Authorisation Imports: SC to Examine Limits on Interest and Penalty
Conclusion- As per Section 111(o) of the Customs Act, the goods shall be liable for confiscation in the event the condition subject to which the goods are exempted from duty is not observed. As already held by us on the basis of the Judgement of the Hon’ble Supreme Court in the case of Orient Fabrics Limited (supra), Section 3 (12) of the Tariff Act, after its amendment by Finance (No.2) Act, 2024, dated 16thAugust, 2024, makes applicable the provisions relating to interest, offences and penalties of the Customs Act to the Tariff Act. As already held by us, Section 3 (12) of the Tariff Act, as amended, is applicable only after 16th August,2024 and is not applicable to the present case. Accordingly, in the present case, no confiscation could have been imposed.
