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2011 (4) TMI 313 - AT - CustomsPenalty u/s 117 - Custom House Agent - Imported goods remained in warehouse beyond permissible warehousing period of 12 months - Did not apply for extention - Re-export - Since, the importer submitted that due to lack of market demand for the product , they are not clearing the goods, but wish to re-export the balance unclerared quantity to the foreign buyers - Held that - mere failure by the Custom House Agent to carry out his duties in accordance with law by itself is not sufficient ground to impose personal penalty under section 117 of the Customs Act, 1962 unless there is evidence to show that the failure was on account of mala fide intention - As per the case of Syndicate Shipping Services Pvt.Ltd. Vs. CC Chennai 2003 -TMI - 51852 - CEGAT, SOUTH ZONAL BENCH, CHENNAI , decided in favour of assessee.
Issues:
Imposition of penalty under Section 117 of the Customs Act, 1962 without establishing malafide intention for not clearing imported goods within the warehousing period. Analysis: The case involved M/s Hazel Mercantile Ltd. Mumbai, who imported Mosstanol L and warehoused it but failed to clear some quantity within the permissible 12-month warehousing period, without applying for an extension. The adjudicating authority allowed re-export of the remaining quantity but imposed a penalty of Rs.1 lakh under Section 117. The appellant contended that there was no deliberate violation of the Customs Act, and no malafide intention was proven for the delay in clearing the goods beyond the normal period. The Commissioner (Appeals) rejected the appeal, citing certain decisions, which were deemed irrelevant as the importer's main reason for not clearing the goods was the lack of market demand, intending to re-export the balance quantity. The order of the adjudicating authority imposing the penalty was found to lack reason or evidence. The judgment highlighted that penalties under Section 117 require sufficient evidence of malafide intention leading to contravention, as discussed in the case of Syndicate Shipping Services Pvt. Ltd. vs. CC Chennai. It was emphasized that mere failure to comply with duties is not enough for personal penalty unless there is evidence of malafide intention. The Tribunal concluded that no evidence was presented to establish any malafide intention by the appellant, making the penalty under Section 117 unsustainable. Therefore, the appeal was allowed based on the lack of evidence supporting the imposition of the penalty without proving malafide intention for not clearing the imported goods within the warehousing period.
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