2019 (9) TMI 1533 - AT - Customs

Penalty u/s 114A of Customs Act - non-inclusion of demurrage charges in the assessable value for the purpose of calculating customs duty itself - suppression of facts or not - HELD THAT - The inclusion of demurrage charges itself has been struck down by the Hon ble High Court of Orissa in TATA STEEL LTD. AND ORS. VERSUS UNION OF INDIA AND ORS. 2019 (10) TMI 226 - ORISSA HIGH COURT , as ultra vires of constitution/section 14 of the Customs Act. Therefore, even if they had not included nor paid the customs duty on such amount they cannot be faulted. Therefore, the penalty imposed under section 114A is not sustainable and is liable to be set aside. Penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Imposition of penalty under section 114A of the Customs Act, 1962 for alleged suppression of information regarding landing charges on demurrage charges in the assessable value calculation for customs duty.

Detailed Analysis:
1. The appeal was filed against an order imposing penalty under section 114A of the Customs Act, 1962. The appellant had imported goods and paid customs duty, including 1% landing charges and demurrage charges. The department alleged that landing charges should also apply to demurrage charges. However, the appellant contested this, citing a judgment by the Hon'ble High Court of Orissa that struck down the provision including demurrage charges in the assessable value calculation.

2. The appellant argued that the demurrage charges, including landing charges, were held ultra vires of the Customs Act by the Orissa High Court and should not be included in customs duty calculations. The appellant had already paid the duty but contested the penalty under section 114A. The appellant also referred to a judgment involving M/s Wipro Ltd, where the Supreme Court held that 1% landing charges could only be included if actual costs were unascertainable.

3. The Tribunal noted the arguments and the Orissa High Court's decision on demurrage charges. It concluded that since demurrage charges had been struck down from the assessable value calculation, the penalty under section 114A was not sustainable. Therefore, the Tribunal allowed the appeal and set aside the penalty imposed, providing consequential relief.

This detailed analysis covers the issues involved in the legal judgment, including the arguments presented, relevant case law references, and the final decision by the Tribunal.