2014 (5) TMI 711 - AT - Customs

Penalty u/s 117 - violation of Section 61 of Customs Act, 1962 - extension of time for warehousing the goods - Held that - no time limit has been prescribed for filing extension for warehousing of the goods. As no time limit is prescribed, therefore, appellant are at liberty to file application for extension of warehousing till the period they have not been asked to pay duty. In this case, admittedly, after expiry of the bonded period, no duty liability was fastened on the appellant and extension has been granted to them. In these circumstances, the appellant has not violated provision of Section 61 of the Customs Act, 1962 - penalty under Section 117 of the Customs Act, 1962 are not imposable - Decided in favour of assessee.

Summary

Issues:
Appeal against imposition of penalty under Section 117 of the Customs Act, 1962 for violation of Section 61 of Customs Act, 1962.

Analysis:
The case involved an appeal against the imposition of a penalty under Section 117 of the Customs Act, 1962, for violating Section 61 of the same Act. The appellant had filed bills of entry for warehousing goods under Section 60 of the Customs Act, 1962, and later applied for an extension of time for warehousing, which was granted subject to the penalty. The appellant contended that there was no specific time limit under Section 61 for extending the warehousing period, and extension could be granted based on peculiar circumstances. The appellant argued that they had not violated Section 61 and, therefore, the penalty was unjustified.

The appellant's counsel argued that Section 61 did not specify a time limit for applying for an extension of the warehousing period. It was highlighted that the proper officer did not find the case to be peculiar, yet the extension was granted. The appellant maintained that since no duty liability was imposed after the bonded period expired, they had not breached Section 61. On the contrary, the respondent contended that the failure to apply for the extension in a timely manner constituted a violation of Section 61, justifying the penalty under Section 117.

Upon examining the provisions of Section 61, the judge found that there was no explicit time limit prescribed for filing an extension for warehousing goods. Consequently, the appellant had the liberty to apply for an extension until they were required to pay duty. As no duty liability was imposed on the appellant after the bonded period expired, the judge concluded that the appellant had not contravened Section 61. Therefore, the judge held that the penalty under Section 117 was not applicable in this case. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief.

In conclusion, the judgment clarified the interpretation of Section 61 regarding the extension of warehousing periods, emphasizing that no specific time limit was prescribed. The decision highlighted that penalties under Section 117 should not be imposed when no violation of the relevant provisions had occurred, ultimately ruling in favor of the appellant and overturning the penalty orders.