Karnataka High Court
M/S Rajesh Exports Limited vs Principal Commissioner Of Customs on 14 September, 2018
Bench: Chief Justice, S G Pandit
CSTA.No.04/2017
-1-
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF SEPTEMBER, 2018
PRESENT
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
AND
HON'BLE MR.JUSTICE S.G.PANDIT
CSTA NO.4 OF 2017
BETWEEN:
M/S. RAJESH EXPORTS LIMITED
NO.4, BATAVIA CHAMBERS
KUMARA KRUPA ROAD
KUMARA PARK EAST
BANGALORE 560 001.
BY ITS MANAGING DIRECTOR
SHRI PRASHANTH MEHTA. ... APPELLANT
(BY SRI KIRAN S. JAVALI, ADVOCATE)
AND:
PRINCIPAL COMMISSIONER OF CUSTOMS
C. R. BUILDINGS
QUEEN'S ROAD
BANGALORE 560 001. ... RESPONDENT
THIS APPEAL IS FILED UNDER SECTION 130A OF
THE CUSTOMS ACT, 1962, ARISING OUT OF ORDER DATED
29.12.2016 PASSED IN FINAL ORDER NO.21513/2016,
PRAYING THIS HON'BLE COURT TO HEAR THE APPEAL OR
ANY OTHER SUBSTANTIAL QUESTION OF LAW NOT
FORMULATED, IF IT IS SATISFIED THAT THE CASE
INVOLVES SUCH QUESTIONS OF LAW REFERRED TO IN
PARAGRAPH (8) ABOVE AND SET ASIDE THE FINAL
ORDER NO.21513/2016 DATED:29.12.2016 VIDE
ANNEXURE-A.
THIS APPEAL COMING ON FOR ADMISSION THIS
DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
CSTA.No.04/2017
-2-
ORDER
The appellant is before this Court, challenging the order dated 19.01.2016 passed by the Principal Commissioner of Customs, while permitting re-export, but with imposition of penalty of Rs.1,00,000/- under Section 117 of the Customs Act, 1962 (hereinafter referred to as "the Act" for short) and Final Order No.21513/2016 dated 29.12.2016 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the CESTAT" for short), South Zonal Bench, Bangalore, by which, order dated 19.01.2016 passed by the Principal Commissioner of Customs is upheld.
Briefs facts of the case are that:
The appellant imported gold bars under two Bills of Entry from M/s.Valcambi SA, Switzerland. The appellant had imported the gold bars under advanced authorization and if the imports were under advanced authorization, they are duty free. To claim exemption of duty under Notification No.12/2012-Cus dated 17.03.2012, the import of goods shall be gold bars other than tola bars, should bear the CSTA.No.04/2017 -3- manufacturer's or the refiner's engraved serial number and weight expressed in metric units. But the gold imported by the appellant did not bare engraving of weight in metric unit and were not eligible for exemption of duty. As such, the Bill of Entry was returned and appellant/importer was asked to clarify the eligibility for exemption claimed at the time of filing the Bill of Entry. The appellant, vide letter dated 14.01.2016 replied that engraving of weight was inadvertently missed out and requested reassessment of Bill of Entry without considering the benefit of notification No.12/2012-Cus dated 17.03.2012. The appellant/importer was asked to produce certain documents for provisional assessment. But the appellant/importer requested for re-export of consignment back to the supplier, in the absence of engraved weight on the gold bars, waiving show-cause notice. The Principal Commissioner, Customs by his order dated 19.01.2016 permitted the appellant to re-export the gold bars imposing penalty of Rs.1,00,000/-
under Section 117 of the Customs Act. Being aggrieved by the order dated 19.01.2016, the appellant filed an appeal before the CESTAT, South Zonal Bench, Bangalore in CSTA.No.04/2017 -4- C/20277/2016-SM. The Tribunal, by its order dated 29.12.2016 rejected the appeal and upheld the order dated 19.01.2016 passed by the Principal Commissioner, Customs.
The appellant has filed the present appeal challenging both the orders passed by the Principal Commissioner, Customs as well as the order passed by the Tribunal, suggesting the following questions of law:
"(a) Whether the Hon'ble Tribunal was right in confirming the Orders appealed against without assigning any reasons.
(b) Whether the Tribunal was right at Law to have upheld the levy of re-export fine contrary to Circulars and Law.
(c) Whether the order of the Respondent No.1 and confirmed in Appeal levying penalty was sustainable contrary to the provisions of the Customs Act.
(d) Whether the Respondent and Tribunal were right at Law to have confirmed the penalty, when the circumstances did not warrant the same.
Learned counsel for the appellant submits that there is no fault or mistake on the part of the appellant, if the imported gold bars were not having engraved weight on the CSTA.No.04/2017 -5- gold bars. It is the mistake of the exporter. For absence of engraved weight on the gold bar, the importer cannot be penalized. In the facts and circumstances, the learned counsel for the appellant submits that imposition of penalty of Rs.1,00,000/- is not called for. Learned counsel for the appellant further submits that levy of maximum penalty under Section 117 of the Act was not called for as there was no contravention of any of the provisions of the Act by the appellant/importer.
Section 117 of the Act reads as follows:
"117. Penalties for contravention, etc., not expressly mentioned:- Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees."
The above provision enables the authority to impose penalty not exceeding one lakh rupees on any person who contravenes any provisions of the Act or abets any such contravention, where no express penalty, elsewhere provided for such contravention.
CSTA.No.04/2017-6-
Imposition of penalty under the above provision is discretionary power of the authority. Maximum levy of penalty is prescribed at rupees one lakh. The authority having found that the imported goods did not satisfy the exemption notification No.12/2012-Cus and the appellant/importer had claimed ineligible duty exemption and having regard to the fact that the appellant/importer had sought for re-export of the goods waiving requirement of show-cause notice, imposed penalty of Rs.1,00,000/- while permitting the appellant/importer to re-export the imported gold bars. On examination of material on record, the Principal Commissioner has held that the imported goods are not eligible for duty exemption and further it is also observed that the appellant and the supplier/exporter are related parties and the importer does not have any prior registration of the case with the Special Valuation Branch. The imposition of penalty under Section 117 of the Act is discretionary. When the authority exercises its discretion to impose penalty, no question of law would arise from such imposition of penalty, in the absence of allegation of arbitrary or malafide exercise of discretionary power. No CSTA.No.04/2017 -7- such arbitrariness or malafide exercise of discretionary power is alleged nor it is the case of the appellant that the Principal Commissioner of Customs has exercised his discretionary power under Section 117 of the Act in an arbitrary manner or in a malafide exercise of power.
For the reasons stated above, no question of law much less the question of law suggested by the appellant would arise for consideration in the above appeal.
Accordingly, the appeal is dismissed.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE mpk/-*CT:SK