2012 (9) TMI 177 - AT - Customs

Subletting of the customs area to some non-vessel operating cargo carriers - handling both import and export of the goods as custodian (CFS) - penalty u/s 117 on violation of the provisions of Section 45 2(b) - Held that - As per Section 45 (2) (b) there is no restriction on the appellants not to sublet the premises but is not permitted for the removal of goods the Customs area without the permission of the proper officer. As there is no allegation against the appellants that they have removed the goods without the permission of the proper officer they have not violated the provisions of Section 45 (2) (b) as alleged in the impugned order and exists no finding on violation of the Handling of Cargo in Customs Area Regulations, 2009 - when there is no specific contravention of the Act which has been violated by the appellant, penalty under Section 117 of the Customs Act is not sustainable - in favour of assessee.

Summary

Issues:
1. Modification of stay order based on alleged mistake by Tribunal.
2. Imposition of penalty under Section 117 of the Customs Act, 1962 for contravention of provisions.

Issue 1: Modification of Stay Order
The Revenue filed an application seeking modification of the stay order granted to the appellant, arguing that the Tribunal made a mistake by not considering the contravention of para-16 of CBEC Circular No.128/95-Cus. The adjudicating Commissioner had specified this contravention in paragraph 13 of the order. However, the Tribunal found no infirmity in the stay order as the Commissioner did not mention contravention of any provision of the Customs Act, 1962. The Tribunal dismissed the application for modification, stating that no mistake was committed in granting the stay order.

Issue 2: Imposition of Penalty under Section 117
The appellants were penalized under Section 117 of the Customs Act, 1962 for subletting space in their Container Freight Station (CFS) without permission and allowing non-vessel operating cargo carriers to operate within the CFS. The adjudicating Commissioner found that this arrangement contravened para-16 of CBEC Circular 128/95 CUS and imposed a penalty of Rs.50,000. The appellants challenged this penalty, arguing that they did not violate Section 45 (2) (b) of the Customs Act, which prohibits removing goods without proper officer permission. The Tribunal noted that there was no evidence of goods being removed without permission and no violation of Handling of Cargo in Customs Area Regulations, 2009. As the contravention of the Act was not specified by the Commissioner, the Tribunal set aside the penalty under Section 117 and allowed the appeal.

In conclusion, the Tribunal upheld the original stay order and dismissed the application for modification. It set aside the penalty imposed under Section 117 of the Customs Act, 1962, as the appellants were not found to have contravened any specific provision of the Act. The judgment emphasizes the importance of clearly specifying the provisions contravened when imposing penalties under the Customs Act.