Custom, Excise & Service Tax Tribunal
M/S. Fast Forward Express Courier vs Commissioner Of Customs, Chennai on 24 June, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/00187/2012
[Arising out of Order-in-Appeal No.C.Cus. No.691/2012, dated 10.07.2012 passed by the Commissioner of Customs (Appeals), Chennai]
1. Whether Press Reporters may be allowed to see the Order
for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s. Fast Forward Express Courier
Appellant
Versus
Commissioner of Customs, Chennai
Respondent
Appearance:
S/Shri Krishnanandh & B. Satish Sundar, Adv/s.
Shri Parmod Kumar, SDR For the Appellant For the Respondent CORAM:
Honble Shri P.K. Das, Judicial Member Date of hearing : 26.06.2013 Date of decision : 26.06.2013 Final Order No.40437/2013 The appellant is a courier company registered with the Customs authorities under the Courier Imports and Exports (Clearance), Regulation 1998 [in short, Regulation, 1998]. In exercise of powers conferred under Section 157 of the Customs Act, 1962, the Central Board of Excise & Customs made the Regulation, 1998.
2. On 22.06.2009, the appellant filed Bills of Entry Nos.045774, 045775 and 045576 all dated 22.06.2009 in respect of twenty parcels arrived from Bangkok, which were detained to verify the genuineness of the consignees and their addresses. A Show-cause notice dated 04.11.2009 was issued proposing to confiscate twelve parcels valued at Rs.78,123/- under Section 111 (d), (f), (l) and (m) of the Customs Act, 1962 and to impose penalty for violation of Regulation 3(a) and Regulation 13 (a) of Regulation 1998 and also to impose penalty under Sections 112 and 117 of the Customs Act, 1962 to the appellant amongst others. The adjudicating authority confiscated the 12 parcels and a penalty of Rs.60,000/- was impsed on the appellant for violation of Regulation 3(a) of Regulation 13(a) of Regulation 1998 under Section 112 read with 117 of the Customs Act, 1962. Commissioner (Appeals) modified the adjudication order and hold that in the instant case Section 111 (d), (f), (l) and (m) cannot be invoked and penalty under Section 112 is set aside. However, penalty under Section 117 was upheld and rduced to Rs.5,000/-.
3. The learned advocate on behalf of the appellant submits that appellant is a well reputed courier company registered under Regulation 1998 and the imposition of penalty even a meager amount would affect their business and, therefore, Tribunal accepted their appeal vide order dated 12.09.2012. He submits that it is apparent from the impugned order that as soon as the goods arrived in the airport, they filed the bill of entry as per manifest and the goods were detained by the Customs authorities on the same date. It is also submitted that as per the regular practice, after filing the bill of entry, they obtained their authorisation for release the goods on the basis of authorisation. In the present case, the Customs authorities detained the goods to verify the genuineness of the consignees. Out of the twenty consignments, eight consignees appeared and produced the address proof and the goods were released. The eight consignees disowned the goods. Out of the remaining four consignees, three consignees to whom letter was sent, returned with remarks not available, not known and no such person exists. As regards the fourth one, though the consignee received the letter, but not appeared. He submits that the goods of twelve consignees were confiscated and eight consignees appeared before the Customs authorities but they were not made parties to the proceedings and no penalty was imposed on them. There is no proposal in the Show Cause Notice also for imposition of penalty. He also submits that as soon as the goods arrived in the airport, the department detained the goods and, therefore, they were not able to procure the authorization. He further submits that without prejudice, for violation of the Regulation 13(9) penalty cannot be imposed under Section 117 of the Customs Act, 1962. It is submitted that Regulation 14 of Regulation 1998 provides for penal provisions insofar as de-registration. He further submits that Section 157 of Customs Act, 1962 provides power to make regulations. Clause (ii) of sub-section (2) of Section 158 of the Act, 1962 provides that any person, who contravenes any provisions of Rule or Regulations, such contravention, shall be liable to a penalty. Hence, penalty under Section 117 cannot be sustained.
4. The learned authorised representative on behalf of the Revenue submits that the applicant a Registered Courier Agency, is required to obtain the authorization before filing of the bill of entry and Regulation 13(a) would apply. He further submits that in the facts and circumstances of the case, it is a clear case of violation of Section111 and penalty under Section 112 is sustainable. The value of the goods as declared is incorrect and, therefore, Section 111(m) would apply and penalty under Section 112 is sustainable. However, the department is not filing appeal against the meager amount and, therefore, they are not in appeal against the Commissioner (Appeals) order on this issue. He further submits that Section157 has given power to make regulations and Section 117 is a residual section. Here, Section 117 would apply as no express provisions is provided in the regulation. He also relied upon the decision of the Tribunal in the case of Commissioner of Customs, Ahmedabad Vs ACX International reported in 2012 (286) 602 (Tri.-Ahmd.). Without prejudice, he submits that wrong mentioning of Section cannot waive the penalty.
5. After hearing both sides and on perusal of the records, I find that penalty was imposed on the ground that the appellant failed to produce authorization as required under Regulation 13 (a) of Regulation, 1998. It provides that an authorised courier shall obtain an authorization, from each of the consignees of the import goods for whom such Courier has imported such goods or consignors of such export goods which such courier proposes to export, to the effect that the Authorised Courier may act as agent of such consignee or consignor, as the case may be, for clearance of such import or export goods by the proper officer.
6. The case of the appellant is that the goods arrived on 22.06.2009 and they filed the bill of entry as per manifest and the goods were also detained on the same date. It is contended that after filing of the bill of entry, they obtained the authorisation for clearance of the goods as per normal practice. Be that as it may, it is seen that eight consignees appeared and goods were cleared to them. Apart from that, eight consignees also appeared and disowned the goods. In any event, three consignees are non-existent and the other person received the notice but did not turn up. The Commissioner (Appeals) observed that after thorough discussions that in this factual background none of the clauses of Section 111 would be invoked and, therefore, imposition of penalty under Section 112 is set aside. It is noted that the learned Authorised Representative on behalf of the Revenue made an elaborate submission on this issue but no appeal was filed by the Revenue. Hence, I do not find any reason to discuss on this issue. Learned Authorised Representative on behalf of the Revenue relied upon the decision of the Tribunal in the case of ACX International (supra). In that case, the goods are confiscated under Section 111 of the Customs Act and, therefore, the penalty under Section 112 (a) of the said Act was upheld. In the present case, the Commissioner (Appeals) already set aside the penalty under Section 112 of the Act and, the case law would not apply herein. The Commissioner (Appeals) observed that this non-compliance is only a stray aberration, which deserves lenient treatment.
7. Since the decision of the Honble Supreme Court in the case of Hindustan Steel Ltd. Vs State of Orissa reported in 1978 (2) E.L.T.J.159) S.C; it is well settled that in the case of imposition of penalty, conduct and/or attendant extenuating circumstances are material and relevant. In the case of Akbar Badruddin Jiwani Vs Collector of Customs reported in 1990 (47) E.L.T.161 (S.C.), the Supreme Court held as follows :-
57. Before we conclude it is relevant to mention, in this connection, that even if it is taken for arguments sake that the imported article is marble falling within Entry 62 of Appendix-2, the burden lies on the Customs Department to show that the appellant has acted dishonestly or contumaciously or with the deliberate or distinct object of breaching the law;
58. In the present case, the Tribunal has itself specifically stated that the appellant has acted on the basis of bonafide belief that the goods were importable under OGL and that, therefore, the appellant deserves lenient treatment. It is, therefore, to be considered whether in the light of this specific finding of the Customs, Excise & Gold (Control) Appellate Tribunal, the penalty and fine in lieu of confiscation required to be set aside and quashed. Moreover, the quantum of penalty and fine in lieu of confiscation are extremely harsh, excessive and unreasonable bearing in mind the bonafides of the appellant, as specifically found by the Appellate Tribunal;
59. We refer, in this connection, the decision in Merck Spares v. Collector of Central Excise of Customs, New Delhi, Sharma Engine Valves Ltd., Bombay v. Collector of Customs, Bombay and Madhusudan Gordhandas & Co. v. Collector of Customs, Bombay wherein it has been held that in imposing penalty the requisite mens rea has to be established. It has also been observed in Hindustan Steel Ltd. v. State of Orissa 1978 (2) E.L.T. (J159) (SC) by this Court that :-
The discretion to impose a penalty must be exercised judicially. A penalty will ordinarily be imposed in case where the party acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute.
60. In the instant case, even if it is assumed for arguments sake that the stone slabs imported for home consumption are marble still in view of the finding arrived at by the Appellate Tribunal that the said product was imported on a bonafide belief that it was not marble, the imposition of such a heavy fine is not at all warranted and justifiable."
8. It is noted that that there are also decisions to the effect that penalty is imposable for contravention of rules and regulations in the context of particular facts of law of the cases. But, in the present case, when the Commissioner (Appeals) has come to a finding that this non-compliance is only a stray aberration which deserves lenient treatment and then, in my view, a merely a penalty is imposable under the provision, it is not necessary that it must always be imposed.
9. After considering the overall facts and circumstances of the case and the conduct of the appellant, I find it is fit case that the penalty should be set aside after giving a caution to the appellant that to take extra care in future. Accordingly, the penalty is set aside the appeal is allowed with consequential relief.
(Dictated and pronounced in open court) (P.K. DAS) JUDICIAL MEMBER ksr DRAFT Remarks I II III Date of dictation 24.06.2013 Draft Order - Date of typing 26.06.2013 30.09.2013 01.10.2013 Fair Order Typing 04.10.2013 Received today only for fair typing on 1.10.13 Date of number and date of dispatch 04.10.2013 11