Custom, Excise & Service Tax Tribunal
Dahej Harbour And Infrastructure ... vs Ahmedabad on 9 May, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
REGIONAL BENCH - COURT NO. 03
Customs Appeal No. 12467 of 2018-SM
[Arising out of OIO-AHM-CUSTM-000-COM-023-18-19 dated 06/06/2018 passed by Commissioner
of CUSTOMS-AHMEDABAD]
M/s Dahej Harbour And Infrastructure Limited .....Appellant
Vagra, Dahej, Bharuch-392130
VERSUS
C.C.-Ahmedabad .....Respondent
Custom House, Ashram Road, Ahmedabad-380009 APPEARANCE:
Shri. T. Viswanathan , Advocate for the Appellant Shri. T.K. Sikdar, (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL) , MR. RAMESH NAIR FINAL ORDER NO.__A/_10814_/2019 DATE OF HEARING:11.01.2019 DATE OF DECISION: 09.05.2019 PER: RAMESH NAIR The brief facts of the case are that the appellant M/s Dahej Harbour And Infrastructure Ltd. was appointed as custodian of the Birla Copper Jetty at Port Dahej through custom Notification 9/2004 and 8/2004. As per the mail received by the appellant the arrival of the vessel MV TAO ACE is 30.06.2017 accordingly, the appellant filed proper bill of entry no. 2218283 dated 23.06.2017 and tendered all relevant documents including advance authorization requesting for assessment. Due to bad weather, the vessel arrived at Anchorage Point on 01.07.2017 instead of 30.06.2017. On 06.07.2017 the vessel MV TAO ACE was birthed at the jetty, the custom officer board the vessel for examination of imported goods and discharge of the cargo commenced.
On 07.07.2017 goods were discharged and board clearance certificate
2|Page C/12467/2018-SM was issued by Superintendent of Custom, Dahej. Investigation was initiated and punchnama was drawn on the ground that the goods were allowed to be cleared by custodian without approval of the proper officer of custom. This was due to the fact that the importer who filed prior bill of entry culminating complete exemption from payment of duties was not intended to IGST exemption and he ought to have paid IGST on the imported goods (copper concentrate). Statement of Sh. Deepak Razdan and Sh. Anand Mohan were recorded on 24.07.2017. Again statement of both the persons were recorded on 08.08.2017. On 28.08.2017 IGST including interest amounting to Rs. 6,57,58,940/- was paid. A SCN dated 26.09.2017 was came to be issued alleging that the appellant have violated regulation 6(f) and (q) of the handling of cargo in Customs Area Regulation 2009. After issuing the inquiry report to the appellant and personal hearing, the impugned order dated 06.06.2018 was issued whereby a penalty of Rs. 50, 000/- was imposed on the appellant, therefore, the present appeal.
2. Sh. T. vishwanathan, Ld. Counsel appearing on behalf of the appellant submits that the part of the factory of M/s Hindalco Industries Ltd is also notified as a land place/custom area and jetty does not have storage place. Thus it is important to store the imported goods at jetty, thus, once the entry inward by customs is granted, the imported good has to be unloaded at factory of the Hindalco Industries Ltd. through the conveyer belt. He submits that no proceeding was initiated against the shipping line for violation of Section 30, 31, 32 and 33 of the Customs Act. In other words, it is not the grievance of the customs that the cargo has been discharged without filing IGM or without receiving entry in warded from customs. The appellant have not violated the regulation 6(f) and 6(q) of handling of cargo in customs area regulation 2009. He submits that regulation 6(f) is applicable in a situation where the goods are kept/stored in the customs are for safe
3|Page C/12467/2018-SM custody and therefore custodian is responsible for the safe custody of the said goods in customs area. In the present case, imported goods in store in customs area before clearance of imported goods for whom consumption and imported goods are duty free as per provisional assessment of advance bill of entry. The goods were unloaded from vessels and directly transferred to the factory of Hindalco Industries Ltd through conveyer belt. The goods were not stored or unloaded at customs area for safe custody of the custodian. The appellant being custody is not involved in keeping safe custody of imported goods, thus regulation 6(f) is not violated in the present case. He submits that all the provisions of chapter 6 of the Customs Act have been complied with in every case including the present imports under question. He submits that the following aspects may also be taken into consideration:
a) The jetty is being in operation for over 15 years.
b) The jetty is being used exclusively for import of goods or export of goods by Hindalco;
c) Very rarely and in stay cases, the jetty has been used by M/s Sanjana Cryogenics, who is situated within the factory premises of Hindalco;
d) The goods imported are not restricted goods; they are freely importable;
e) The self-assessed duty (or provisionally assessed duty) is always paid in advance by Hindalco. Even in this case, the assessed duty has been paid at the time of discharge of Cargo. The differential duty arose in the case due to late arrival of the vessel and due to change in the tax regime;
f) The entire operation is under control of customs officers posted specifically for this purpose;
g) Both the Appellants and Hindalco pay charges to customs department as per the norms/circulars issued time to time;
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h) The customs department on most of the ports has already implemented direct port delivery, differed payment of customs duty etc., thereby requiring the out of charge as a matter of procedure, especially when the goods imported are freely importable and self-assessed duty is always paid;
In view of above aspects, the appellant have not violated any of the provision of the act under Rules, Regulations, Notifications and orders issued therein. He submits that in the present context whether the goods are duty free and provisional assessment is done than entry inward shall be considered equivalent to out of charge. He also submits that there is no short payment of custom duty as bill of entry is provisionally assessed and therefore, is not final assessment of bill of entry by customs. The appellant being custodian has permitted Hindalco Industries Ltd to discharge the imported goods without payment of duty or without out of charge order given by Custom Officer. There is no short payment of custom duty as there is no final assessment of bill of entry No. 2218283 dated 23.06.2017. The custom duty can be ascertained only at the time of final assessment of bill of entry. At the time of provisional assessment, the advance authorization was adopted towards the value of imported goods. The imported goods reached into India after introduction of GST, thus, the provisional assessment is yet to be finalized in the terms of Section 15 of the Customs Act to apply correct rate of all customs duty on the date of import. Thus, in absence of final provisional assessment of bill of entry it can be contended that Hindalco Ltd. had not paid applicable customs duty. He also referred to the Board Circular dated 01.07.2017, according to which it was clarified that in case whether cargo arrival is after 01.07.2017 and an advance bill of entry was filed before 01.07.2017 along with payment of duty is bill of entry may be recalled and reassessed by the proper officer for levy of IGST and GST compensation CESS as applicable. In the present
5|Page C/12467/2018-SM case, the Hindalco has already paid the applicable IGST along with interest. Without prejudice to the above submission he makes further submission that differential duty arises due to introduction of GST rising should it is not intentional evasion.
3. Sh. T.K. Sikdar, Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. Heard both the sides and perused the records. I find that the limited issue is involved that whether the appellant has violated their regulation 6(f) and 6(q) of Handling of Cargo in Custom Area Regulation 2009 and consequently whether they are liable for penalty in terms of regulation 12(8) of HCCAR 2009. For ease of reference, the Regulation 6(f) and 6(q) of HCCAR 2009 is reproduced below:
"(f) not permit goods to be removed from the customs area , or otherwise dealt with except under and in accordance with the permission in writing of the proper officer;
(q) abide by all the provisions of the Act and the rules, regulations, notifications and orders issued thereunder."
From the plain reading of the above Regulation, I find that the goods from the custom area cannot be allowed to be removed without the permission in writing of the proper office. It is also a fact that at the time of removal of goods M/s Hindalco did not pay the applicable IGST which was effective from 01.07.2017 however the same was paid on 28.08.2017. Therefore, the appellant being a custodian has contravened the provisions of Regulation 6(f) and 6(q) of HCCAR, 2009 for this offence the penalty is provided under Regulation 12(8) of HCCAR 2009 reproduced below:
'(8) If any Customs Cargo Service provider contravenes any of the provisions of these regulation, or abets such
6|Page C/12467/2018-SM contravention or who fails to comply with any provision of the regulation with which it was his duty to comply, then, he shall be liable to a penalty which may extend to fifty thousand rupees."
From the above Regulation 12(8) it is seen that the penalty of 50,000/- is maximum one which was imposed by the adjudicating authority. However considering the overall facts and circumstances of the case, I am of the view that the appellant though violated the Regulation but it was not intentional, particularly when the levy of IGST came into effect on the same day i.e. 01.07.2017. Considering this position, I am of the view that a lenient view has to be taken, hence, I reduce the penalty from Rs. 50,000/- to Rs. 10,000/-. Accordingly, the appeal is partly allowed in above terms.
(Pronounced in the open court on 09.05.2019) (Ramesh Nair) Member (Judicial) Neha