2016 (6) TMI 444 - AT - Customs

Benefit of penalty at reduced rate - Non payment of appropriate Customs Duty - DTA clearance - goods were imported against Duty Free Credit entitlement Certificate - Held that - We find that undisputedly the appellant had imported inputs duty free packed in MS barrels availing the benefit of Notification No.53/2003Cus. Dt.31.03.2003; but failed to pay appropriate duty on the MS Barrels when cleared to Domestic Tariff Area. Since the appellant has failed to establish that MS Barrels are not capable of further use/ repeated use, therefore, appropriate Customs duty ought to have been paid on its clearances to Domestic Tariff Area. Therefore, we do not find merit in the contention of the ld. Advocate for the appellant that duty is not payable on these MS barrels. However, we find force in the submission of the ld. Advocate to the extent that the Appellant are eligible to pay 25% of penalty subject to fulfilment of conditions laid down under the provisions of Section 114A of Customs Act, 1962, in view of the principle of law laid down by Hon ble Gujarat High Court in G.P. Presstress Concrete Works case (2012 (8) TMI 933 - GUJARAT HIGH COURT ) as such an option has not been extended to the Appellant by both the authorities below.

Summary

Issues:
1. Interpretation of Notification No. 53/2003-Cus regarding duty payment on MS Barrels cleared to Domestic Tariff Area.
2. Imposition of penalty under Section 114A of Customs Act, 1962.
3. Applicability of previous judgments in similar cases.
4. Eligibility for reduced penalty based on the principle of law laid down by the Hon'ble Gujarat High Court.

Analysis:
1. The case involved a dispute regarding the clearance of MS Barrels to Domestic Tariff Area without paying the appropriate Customs Duty as required under Notification No. 53/2003-Cus. The appellant argued that since they had imported duty-free inputs and not the MS Barrels, no duty was required on the barrels. However, the Tribunal found that the duty was indeed payable on the MS Barrels when cleared to the Domestic Tariff Area, as the appellant failed to prove that the barrels were not capable of repeated use. The Tribunal referred to previous judgments and upheld the duty payment requirement on the MS Barrels.

2. The appellant contested the imposition of penalty under Section 114A of the Customs Act, 1962. The Tribunal acknowledged the appellant's eligibility to pay a reduced penalty of 25% based on the conditions laid down under the provisions of Section 114A. This decision was influenced by the principle of law established by the Hon'ble Gujarat High Court in a previous case, which had not been considered by the lower authorities in this matter.

3. The Tribunal considered the applicability of previous judgments in similar cases cited by both the appellant and the Revenue. While the appellant argued that these judgments were not relevant to the present case due to the specific circumstances, the Tribunal found merit in the submissions related to penalty reduction based on the principles established by the Hon'ble Gujarat High Court. The Tribunal distinguished the facts of the case from previous judgments and made a decision based on the specific circumstances and legal principles involved.

4. Based on the arguments presented and the legal provisions, the Tribunal modified the impugned order to allow the appeal partly. The decision included upholding the duty payment requirement on the MS Barrels cleared to the Domestic Tariff Area while granting the appellant the option to pay a reduced penalty of 25% as per the conditions specified under Section 114A of the Customs Act, 1962. The Tribunal's decision was influenced by the interpretation of the relevant notifications and legal precedents, ensuring a balanced approach to the issues raised in the appeal.