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Issues involved: Penalty imposed under Regulation 12(8) of Handling of Cargo in Customs Area Regulations, 2009 and under Section 117 of the Customs Act, 1962 for contravention and failure to comply with the provisions of the regulations.
Summary: Regulation 12(8) Penalty: The appellant, a Customs Cargo Service provider, was penalized for not seeking written permission from the Commissioner of Customs before engaging certain service providers, as required by Regulation 6(2) of the Handling of Cargo in Customs Area Regulations, 2009. The appellant argued that they inadvertently failed to obtain permission but applied for it later and were granted permission. The adjudicating authority imposed penalties under both Regulation 12(8) and Section 117 of the Customs Act, 1962. The appellant contended that the penalty under Section 117 was unwarranted as Regulation 12(8) provides for penalties up to a maximum of Rs. 50,000. The Dy. Commissioner (AR) for the Revenue supported the penalties citing lack of timely compliance by the appellant. The Tribunal noted that under Regulation 6(2), written permission is mandatory before sub-contracting or outsourcing functions, failure of which attracts penalty u/s 12(8) up to Rs. 50,000. The penalty under Section 117 was imposed for contravening Section 45(2)(b) of the Customs Act, which requires permission for dealing with imported goods. The Tribunal emphasized that penalties are mandatory upon contravention, irrespective of intent, and the quantum is discretionary. Considering the delayed but eventual compliance by the appellant, the Tribunal reduced the penalties to Rs. 25,000 each under Regulation 12(8) and Section 117. Thus, the appeal was disposed of with reduced penalties, acknowledging the subsequent regularisation of the appellant's actions. Separate Judgement: No separate judgment was delivered by the judges in this case.
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