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Customs, Excise and Gold Tribunal - Bangalore

Afl Private Limited And Ors. vs The Commissioner Of Customs on 14 October, 2005

ORDER
 

S.L. Peeran, Member (J)
 

1. In all these five appeals, a common question of law and facts are involved and hence they are taken up together for disposal as per law. The appellants are all Console agents/freight forwarders of imported goods into India transported by air from various parts of the world into Air Cargo Complex, Bangalore. They are all registered and approved by the Commissioner of Customs under Section 30 of Customs Act to act as Console agents under the said section. As per Section 30 of the Customs Act, the Console agent is enjoined upon to file Import General Manifest (IGM) before arrival of the air craft. During the period from 01.08.2004 to 31.08.2004, the said Console agents filed various IGMs after the arrival of the aircraft and thus it is alleged by the Revenue that they had contravened the provisions of the said section. Hence, they were issued with a Show Cause Notice calling upon them to explain as to why penalty, in terms of the said section, should not be imposed. The appellants explained that they were new to the system and the delay in filing the IGM occurred due to the reasons beyond their control. They also pointed out that the delay in filing the IGMs was due to frequent failure of Customs EDI System. They contended that the delay cannot be solely attributed to them as the department's system was also involved. They pleaded that there was no revenue loss to the Government nor there was injury to any person on account of their delay in filing the IGMs. They pointed out that it was due to procedural delays. However, their explanations have not been considered at all and the Commissioner (Appeals) has proceeded to impose penalties @ Rs. 1,000/- per IGM. In terms of the Commissioner (Appeals)'s order, the total number of IGMs is as follows:

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Sl.No. Company Name Appeal No. No. of IGMs

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Pvt. Ltd.

Limited 5. M/s. Expediters C/234/2005 123 International (India) Pvt. Ltd.

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2. The short question that arises for consideration is regarding the justification to impose penalty in the facts and circumstances of the case and as to whether the said penalty of Rs. 1,000/- on each number of IGM is justified.

3. Heard the learned Counsel who argued on the basis of grounds made out in the appeal memo while the learned SDR defended the order and justified the imposition of penalty in the matter.

4. On a careful consideration, we find that the Commissioner (Appeals) has given several reasons and has also quoted Board's Circular and the provisions of law to justify the imposition of penalties. He has taken a view that the Console agents cannot pass on the blame to some other agency as they are a link in the chain of movement of cargo. He has held that it is for them to ensure as to how they meet the deadline laid down by law. However, he has not adverted to the justification taken by the appellants that the delay in filing the IGM was not attributable to them alone but was also on account of the failure of the system of Customs EDI System. The fact of failure of the system of Customs EDI System has not been disputed nor adverted to in the matter. In case if there was a failure in the system itself, the appellants cannot be said to have been fully responsible for commuting the delay in filing the IGMs. The entire system ought to have been streamlined by the Revenue so that such a failure was not solely accountable on the appellants. It is also not brought before us by the appellant that they had taken up this matter with the authorities to streamline the system to enable them to safeguard their interest and avoid penal provisions. To some extent there is laxity on their part. As both the department and parties are responsible for the delay in filing the IGMs, the entire blame cannot be shifted to the appellants themselves and penalties imposed to the extent indicated on them. The Commissioner (Appeals) has noted that warnings were given to them. However, no such written warnings are on record. We cannot proceed on the basis that appellants were put to warning before the imposition of penalty. There has to be written warning. There is no reference to any such warning in the Show Cause Notice as well. However, the learned Counsel does not seriously contest the imposition of penalty but submits that the penalty has to be commensurate with the offence committed. As there was no revenue loss and the penalty is being imposed as a deterrent to prevent the appellants from committing any laxity or from committing negligence, penalty can only be nominal as the offence has been committed for the first time. The learned Counsel points out to the Apex Court judgment rendered in the case of State of Madhya Pradesh v. Bharat Heavy Electricals wherein the Apex Court has held that maximum penalty is not to be levied and the authorities have got discretion to waive penalty as well. Even in terms of the relevant provisions, the penalty can be waived by the officer if sufficient reasons have been given. As the imposition of penalty is not contested but only the quantum is being contested, we are of the considered view that the penalty imposed of Rs. 1,000/- on each IGM is very excessive. In the light of the Apex Court judgment, we uphold the imposition of penalty but reduce the same to Rs. 200/- per each IGM. The computation of penalty has to be done in terms of number of IGMs arrived by the Commissioner (Appeals) in his order. After due appropriation of the penalties, if any excess payment has been paid, then the appellants are entitled for refund of the same. The appeals are allowed in the above terms with consequential relief, if any.

(Pronounced and dictated in open Court)