Per V.K. Agrawal :

In these five appeals filed by M/s. Tarsem Singh Multani Sons the issue involved is whether the benefit of Notification No. 56/98-Cus. dated 1.8.98 is available in respect of Garlic imported by them and whether penalty under Section 114A of the Customs Act is imposable.

2. Shri G.S. Bhangoo, learned Advocate, submitted that they had imported garlic from Pakistan and claimed exemption from payment of Special Additional Duty of Customs (SAD) under Notification No. 56/98; that the Commissioner under the impugned Order has disallowed the exemption under the said Notification holding that no evidence has been produced by them to show that they had paid any sales tax/local tax/other charges on sale of goods as was required under the Notification; that the provisions of Notification has been misinterpreted by the Department; that the benefit of the Notification will be deniable only if the imported goods are sold from a place in an area where there is no tax on purchase or sale of goods; that exemption would be deniable only if the place of sale is located in an area where there is total tax holiday; that the absence of the word "said" before the word "goods" in the provision to notification is clear indication of the intention of the legislature; that the benefit of the Notification will not be available if the sale of the goods takes place in an area where no tax is chargeable on sale or purchase of the goods. He, further, submitted that the provisions of fiscal statement have to be interpreted on the basis of words used therein without addition of any words; that if the interpretation of the Adjudication Authority is accepted this would amount to adding word "said" before the word "goods" which is not permissible. He also mentioned that the Adjudicating Authority has given his finding in the impugned Order that the intention of imposing SAD was to provide a level playing field to the traders in indigenous goods; that there is no sales tax on sale or purchase of garlic in any state in India and when the traders of indigenous garlic do not bear any incidence of sales tax, there is no basis for levying of SAD on imported garlic and level playing field should be provided to the importers also. Finally the learned Advocate submitted that no penalty is imposable on them under Section 114A of the Act, in view of the decision of the Delhi High Court in the case of M/s. Pioneer Silk Mills Pvt. Ltd. Vs. U.O.I., 1995 (80) ELT 507 (Delhi). He mentioned that the Special Additional Duty is imposed under Section 3A of the Customs Tariff Act and not under Customs Act. Sub-section (4) of Section 3A provides that the provisions of the Customs Act and the Rules and Regulations made thereunder shall so far as may be applied in relation to the duty leviable under Customs Act; that in a similar situation where the duty was levied under Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Delhi High Court held that the Central Excise Act and the Rules cannot be imparted in the Additional Duty Act for the purpose of levy of penalty. He, therefore, contended that accordingly the provisions relating to penalty under Section 114A of the Act cannot be imparted to levy penalty under Customs Tariff Act. Reliance was also placed on the decision in the case of Vishnu Sahai Subhash Chander Vs. CCE, Chandigarh, 2001 (45) RLT 510=2001 (131) ELT 641 (Tribunal).

3.1 Countering the arguments Shri R.C. Sankhla, learned D.R., submitted that Notification No. 56/98-Cus. was issued with a view to avoid double taxation on the goods imported into India and on which special additional duty is levied; that this is apparent from the Notification as it reads that the Central Government having regard to the maximum sales tax, local tax or any other charges for the time being leviable on the like goods on their sale or purchase in India exempts the specified goods from payment of Special Additional Duty; that however, the Notification req