2013 (12) TMI 1093 - AT - Customs

Penalty u/s 117 - Whether penalty can be imposed upon the appellant for delay in exporting the container for which a bond was executed under the provisions of Notification No.104/94-Cus dtd 16.3.1994 - Held that - a penalty under this section can be imposed when there is a contravention of any of the provision of the Customs Act 1962 for which no express penalty is elsewhere provided. It is not brought out by the lower authority as to which provision of the Customs Act 1962 has been violated by the appellant. For non full-filling the conditions of Notification No.104/94-cus dtd 16.3.1994 only customs duty could be demanded from the present appellant but that issue has been decided in favour of the appellant. In the absence of any disclosure as to which provision of the Customs Act 1962 has been violated miscellaneous penalty under Sec 117 of the Customs Act 1962 can not be imposed - Decided in favour of assessee.

Summary

Issues:
Penalty under Sec 117 of the Customs Act 1962 for delay in exporting containers executed under Notification No.104/1994-Cus dtd 16.3.1994.

Analysis:
The appeal and stay application were filed concerning OIA No.392/2013/Cus/Commr(A)/KDL dated 31.5.2013, where a penalty of Rs.30000/- was imposed under Sec 117 of the Customs Act 1962 by the Commissioner (A) Kandla. The appellant, a shipping line, had executed a continuity bond under Notification No.104/1994-Cus dtd 16.3.1994 for containers received under vessel MV Bux Lagoon V.109 but failed to re-export them within the stipulated period, leading to the penalty. The first appellate authority upheld the penalty, prompting the appellant to file the present appeal.

The appellant argued that since the containers were eventually exported and duty demand was dropped, no penalty under Sec. 117 should be imposed as they did not contravene any provisions of the Customs Act 1962. On the other hand, the Revenue contended that the penalty was correctly upheld as the containers were not exported within the specified timeframe, citing a precedent from the Mumbai Bench of CESTAT.

Upon hearing both sides and reviewing the case records, the Tribunal focused on whether the penalty could be imposed for the delayed export of containers covered by the bond executed under Notification No.104/1994-Cus. It was noted that the containers were eventually exported, duty demand was set aside, and the containers were not seized or confiscated. The Tribunal emphasized that once containers are allowed to be exported, the period for export is considered extended by the appropriate authority, leading to the dismissal of the duty demand. The Tribunal distinguished the present case from the precedent cited by the Revenue, where containers were seized and not allowed for re-export.

The Tribunal highlighted Sec. 117 of the Customs Act 1962, which allows penalties for contraventions not expressly mentioned, emphasizing that penalties can be imposed only when a provision of the Act is contravened without an express penalty elsewhere. It was noted that the lower authority did not specify which provision of the Customs Act 1962 was violated by the appellant. As the duty demand issue was decided in favor of the appellant and no violation was disclosed, the miscellaneous penalty under Sec 117 could not be imposed.

In conclusion, the Tribunal allowed the appeal, emphasizing that in the absence of a contravention of a specific provision of the Customs Act 1962, the penalty under Sec 117 could not be upheld.