Law: Customs Act, 1969

Section: 156(1),156(10A),296,305

Law: Sales Tax Act, 1990

Section: 2(44),3,4,13

Law: Customs Rules, 2001

Section: 286,297,298,299,300,301,302,303,304,305, 306,307,307A,307B,307C,307D,307E,307F,30 7G,307H

CUSTOMS ACT, 1969 (IV OF 1969) Section 156(1)10A Inspite of a multitude of opportunities provided, department failed to deposit a reconciliation report to check the veracity of invoice against the appellants accounts, in view of reluctance of department to carry out the verification exercise, benefit of doubt is extended to appellant and accept its stance with regard to sale of process during currency of exemption of sales tax as granted under SRO 551(I)/2008 dated 11.06.2008 --- The appellant relied on certain invoices in order to prove sale of impugned process waste paper during the exempt period, therefore to confirm the veracity of these documentary evidences the respondent department was directed on 15.10.2014 to conduct a reconciliation exercise in order to check the veracity of these invoices against the appellants accounts. They were also required to check existence of buyers and verify ensuing monetary transactions but inspite of a multitude of opportunities provided the respondent department failed to deposit a reconciliation report in this regard therefore, in the aforesaid factual matrix and after appreciation of evidence on record and in view of reluctance of respondents to carry out the verification exercise this Tribunal has been left with no other option but to extend the benefit of doubt to the appellant and accept its stance with regard to sale of process waste during the currency of exemption of sales tax granted under SRO 551(I)/2008 dated 11.06.2008 amended vide SRO 595(I)/2012 dated 01.06.2012. Penal consequences under Clause 10A of Section 156(1) are actuated whence conditions and limitations or restrictions with regard to exemptions under Customs Act are breached. No such event has occurred as DTRE Scheme cannot be equated with an exemption, penalty imposed is vitiated -- It is seen that the adjudicating officer has imposed a penalty of Rs. 5,00,000/-under section 156(1)10A of the Customs Act, 1969 for late submission of Appendix (iii) i.e. reconciliation statement, under Rule 307D of DTRE Scheme. A perusal of controlling part of clause 10A of Section 156(1) reveals that penal consequences under the said clause are actuated whence…