While conducting search and seizure in the premises of Alpha Ltd., the officials recovered large quantity of chemicals. It was found that the chemicals were imported into India without any import license. After adjudicat
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2016
While conducting search and seizure in the premises of Alpha Ltd., the officials recovered large quantity of chemicals. It was found that the chemicals were imported into India without any import license. After adjudication, penalty was imposed and the chemicals were confiscated. However, the Department gave an opportunity to the company to get back the goods after paying fine and duty at the prescribed rate. During the period, the Department notified the chemicals as exempted from customs duty. The assessee claimed the benefit of exemption notified. Give your opinion whether the claim of Alpha Ltd. is tenable? Discuss in the light of a relevant case law.
Answer & Explanation:
The exemption notification is applicable only to imported goods. Imported goods means any goods brought into India through proper channel and licence. Goods imported without a licence are goods imported contrary to prohibitions under customs law. Such goods are liable to confiscation under section 111(d) of the Customs Act . Moreover, Customs Act defines imported goods and smuggled goods separately. Hence, there are two classes of goods. The smuggled goods are not imported goods. Therefore, the exemption notification is not applicable to the assessee who imported the goods without license. This was pronounced by the Apex Court in the case of CC v/s M. Ambalal & Co. (2010) 206 ELT 487 (SC) .
Topics: Indirect Tax
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