2019 (5) TMI 723 - AT - Customs

Imposition of penalty in terms of regulation 12(8) of HCCAR 2009 - violation of regulation 6(f) and 6(q) of Handling of Cargo in Custom Area Regulation 2009 or not? - it was alleged that goods were allowed to be cleared by custodian without approval of the proper officer of custom - HELD THAT - The goods from the custom area cannot be allowed to be removed without the permission in writing of the proper office. It is also a fact that at the time of removal of goods M/s Hindalco did not pay the applicable IGST which was effective from 01.07.2017 however the same was paid on 28.08.2017. Therefore, the appellant being a custodian has contravened the provisions of Regulation 6(f) and 6(q) of HCCAR, 2009 for this offence the penalty is provided under Regulation 12(8) of HCCAR 2009. The appellant though violated the Regulation but it was not intentional, particularly when the levy of IGST came into effect on the same day i.e. 01.07.2017 - quantum of penalty is reduced - appeal allowed in part.

Summary

Issues:
Violation of regulation 6(f) and 6(q) of Handling of Cargo in Custom Area Regulation 2009 leading to penalty imposition.

Analysis:
The case involved the appellant, a custodian of a jetty, appointed for handling imported goods, specifically copper concentrate. The appellant filed a bill of entry for assessment, but due to bad weather, the vessel arrived late at the jetty. The goods were discharged without the approval of the proper customs officer, leading to an investigation and subsequent penalty imposition for violating regulations 6(f) and 6(q) of the Handling of Cargo in Customs Area Regulation 2009.

The appellant argued that the imported goods were directly transferred to the factory of another company, Hindalco Industries Ltd, and not stored at the customs area for safe custody. They contended that since the goods were duty-free as per provisional assessment, the custodian's responsibility for safe custody did not apply. The appellant highlighted various aspects, such as the long operation of the jetty, exclusive use by Hindalco, compliance with Customs Act provisions, and payment of charges to the customs department, to support their case.

The Assistant Commissioner representing the Revenue reiterated the findings of the impugned order, emphasizing the violation of regulations 6(f) and 6(q) by the appellant. The Tribunal, after considering both sides, concluded that the appellant had indeed contravened the regulations by allowing goods to be removed without the proper officer's permission and failing to abide by the provisions of the Act. However, the Tribunal noted that the violation was not intentional, especially given the introduction of IGST on the same day as the incident. As a result, the penalty imposed was reduced from ?50,000 to ?10,000, taking a lenient view due to the circumstances.

In summary, the Tribunal found the appellant guilty of violating regulations 6(f) and 6(q) but reduced the penalty due to the unintentional nature of the offense. The case highlighted the importance of compliance with customs regulations and the consequences of failing to adhere to the prescribed procedures for handling imported goods in a customs area.