2018 (4) TMI 1255 - AT - Customs

Focus Product Scheme - it was found by the Department that the licence was issued against the fake shipping bills - Penalty - Section 129A(iii) of the Customs Act, 1962 - Held that - similar consignment was imported by M/s Singh World Versus CC, New Delhi 2017 (5) TMI 858 - CESTAT NEW DELHI , where it was held that appellants have purchased the licence from the market for import of the goods being the vigilant buyer and penalty not warranted. As the facts and circumstances are identical in the instant case and, more particularly, the license is common for both the consignments imported by them, the assessee - Appellants are entitled to get the relief on the principle of equity before the law. Penalty set aside - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
1. Application of Section 129A(iii) of the Customs Act, 1962 for dismissing an appeal due to a penalty amount less than rupees two lacs.
2. Validity of penalty imposed on the assessee for importing goods against a license issued against fake shipping bills.

Analysis:
1. The Tribunal initially dismissed the appeal filed by the assessee in limine based on Section 129A(iii) of the Customs Act, 1962, as the penalty amount was below the specified threshold. Subsequently, the matter was remanded to the Tribunal by the Delhi High Court to decide the appeal on merit, leading to a review of the case.

2. The case involved the importation of a consignment by the assessee using a transferrable script issued under the 'Focus Product Scheme' authorization by DGFT. The Department alleged that the license was issued against fake shipping bills, resulting in the imposition of a penalty. The Tribunal considered the facts and observed that the appellant had purchased the license from the market, which was issued by DGFT and registered with Customs, with payment made through proper channels. The Tribunal cited precedents indicating that penalties can be waived in cases of bonafide belief without malicious intent. It concluded that the appellant acted vigilantly as a buyer, unaware of the license's authenticity, and that the failure primarily lay with DGFT. Consequently, the Tribunal decided to cancel the penalties based on equity principles and similarities with a prior case involving M/s Sing World.

3. Given the identical circumstances and the common license for both consignments, the Tribunal held that the assessee was entitled to relief under the principle of equity before the law. Following the earlier order and rationale, the Tribunal set aside the impugned order and dropped the penalty imposed on the assessee, ultimately allowing the appeal in favor of the appellants.