2017 (9) TMI 1212 - AT - Customs

Benefit of N/N. 153/94-Cus dated 13.07.1994 - violation of condition of notification - goods of foreign origin imported for repairs and return - provisional release of the said seized grabs - Held that - it appears that the appellant though substantially complied with the conditions of the N/N. 153/94-Cus dated 13.07.1994, they have been negligent in not giving a specific declaration at the time of unloading of subject goods that they were for Repairs and Return - Tribunal s decision in the case of Commissioner of Central Excise, Chandigarh vs. JCT Electronics Ltd. 2009 (11) TMI 727 - CESTAT NEW DELHI and Hon ble Gujarat High Courts decision in the case of IFFCO Ltd. Vs. UOI 1991 (6) TMI 84 - HIGH COURT OF GUJARAT , where it was held that the subject goods namely two grabs are eligible for benefit of the said N/N. 153/94 - There is no dispute about the identity of the subject goods which have already been re-exported and for which the appellant had given required bond undertaking as specified in the said Notification. There are clear procedural contraventions of the customs law and the rules made thereunder by the appellant in case of the subject goods. Therefore, the appellant is liable for the penalty u/s 112 (a) of the Customs Act, 1962 Considering overall facts including the negligence and consequential contravention of customs law, which is in the nature of contravention a penalty of ₹ 2,45,145/- is imposed u/s 112 (a) of the Customs Act, 1962. Appeal allowed - decided partly in favor of appellant.

Summary

Issues Involved:
1. Compliance with Notification No. 153/94-Cus dated 13.07.1994.
2. Procedural lapses in customs documentation.
3. Eligibility for exemption from customs duty.
4. Imposition of penalties and fines under various sections of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Compliance with Notification No. 153/94-Cus dated 13.07.1994:
The appellant argued that they had substantially complied with the conditions of Notification No. 153/94-Cus dated 13.07.1994, except for not expressly declaring at the time of import that the goods were for "Repair and Return." They executed a bond, repaired the goods, and proposed to re-export them within six months. The Tribunal found that while there was negligence in not giving a specific declaration, the substantial compliance with the notification's conditions, as supported by precedents like the Tribunal's decision in Commissioner of Central Excise, Chandigarh Vs. JCT Electronics Ltd. and the Hon’ble Gujarat High Court's decision in IFFCO Ltd. Vs. UOI, entitled the appellant to the benefit of the notification.

2. Procedural Lapses in Customs Documentation:
The appellant acknowledged that they did not file a bill of entry at the time of import or a shipping bill at the time of loading the goods onto the foreign-going vessel. However, they submitted an application to the Superintendent of Customs for offloading the grabs, which was considered a procedural lapse rather than a substantive violation. The Tribunal noted that such procedural lapses should not deny the substantial benefit of the exemption notification if the main conditions were met.

3. Eligibility for Exemption from Customs Duty:
The appellant contended that the exemption should not be denied merely because the goods were used after repair, as the notification did not stipulate such a prohibition. The Tribunal agreed, stating that the notification's purpose was to ensure the goods were not kept in India permanently, and their use after repair did not violate this condition. The Tribunal emphasized that the exemption should be granted if the main conditions were substantially complied with, even if there were procedural lapses.

4. Imposition of Penalties and Fines:
The Commissioner of Customs had imposed a customs duty demand of ?24,51,459/- along with interest and an equivalent penalty, confiscated the grabs, and imposed a fine of ?5,00,000/-. The Tribunal set aside the demand for customs duty, interest, and the equivalent penalty under Section 114A, acknowledging the substantial compliance with the notification. However, the Tribunal imposed a penalty of ?2,45,145/- under Section 112(a) of the Customs Act, 1962, for procedural contraventions of customs law, considering the negligence and consequential contravention.

Conclusion:
The Tribunal modified the impugned order, granting the benefit of Notification No. 153/94-Cus dated 13.07.1994 to the appellant and setting aside the customs duty demand, interest, and equivalent penalty. However, a penalty of ?2,45,145/- was imposed for procedural contraventions. The appeal was partly allowed in these terms.