2020 (10) TMI 181 - AT - Customs

Levy of penalty - late filing to bill of entry - import of Stearic Acid which was partially exempted as per Notification No.12/12-Customs dated 17.03.2012 (Sr. No. 230A), till the amendment of tariff from 30.06.2017 - HELD THAT - Though the importer is required to present the bill of entry before the end of the next day following the day (excluding holidays) on which the Aircraft or Vessel or Vehicle carrying the goods arrives at a Customs station at which such goods are to be cleared for home consumption or warehousing. However, as per sub regulation (2), it is provided that the penalty for late presentation of bill of entry shall be liable to be paid, if there was no sufficient cause for delay in filing the bill of entry. In the present case entire event from time of import till the filing of bill of entry is known to the Custom Department that the appellant intended to claim the exemption notification but due to apparent error in the notification, the appellant was not in a position to file the bill of entry on EDI System - Since, the appellant had strong belief that they are entitled for exemption Notification, they followed up the matter with the Customs, however, the Customs Official knowingly that the goods is exempted insisted the appellant to file bill of entry and pay the entire custom duty and the later they can claim the refund. Once it is admitted that the goods are exempted no any business person would pay the custom duty and clear the goods and this is the reason the appellant were reluctant to file the bill of entry. However, since the Customs Official did not clear the goods under exemption, the appellant had no option but to file bill of entry without claiming the exemption notification. This entire episode is a sufficient cause for delay in filing the bill of entry, therefore, invoking the sub-regulation-(2) of regulation 4, no charges for late presentation of bill of entry should have been demanded from the appellant - the appellant has made out a fit case for non-imposition of charges for late presentation of bill of entry. Accordingly, the charges paid for late filing of bill of entry is refundable to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Applicability of concessional rate of duty on imported product after amendment.
2. Denial of benefit under Notification No. 50/2017-Customs.
3. Imposition of penalty for late filing of bill of entry.
4. Rejection of refund claim for penalty amount.

Analysis:
1. The appellant imported "Stearic Acid" partially exempted under Notification No.12/12-Customs till an amendment in tariff. Despite a new Notification No. 50/2017-Customs, confusion arose due to incorrect classification in the notification. Customs officials denied the concessional rate, leading to the appellant clearing goods under protest. An amending Notification No. 76/2017-Customs rectified the error, restoring the eligibility for exemption. The appellant filed a refund claim for duty and penalty paid, which was rejected by the adjudicating authority. The Commissioner (Appeals) granted a refund for duty but rejected the penalty refund, prompting the present appeal.

2. The appellant argued that the delay in filing the bill of entry was due to the error in the exemption notification, preventing EDI system filing. Customs officials did not extend the exemption benefit, causing the delay. The appellant contended that the penalty was unjust as the delay was beyond their control. The Revenue representative reiterated the impugned order's findings, referencing the Commissioner of Custom's comments.

3. The issue focused on the legality of the penalty imposed for late bill of entry filing and the subsequent rejection of the penalty refund. Regulation 4 of the Bill of Entry (Forms) Regulations, 1976 stipulates penalties for late presentation of bill of entry, but exempts charges if there was a sufficient cause for the delay. The appellant's inability to file timely due to the notification error and Customs' insistence on payment before claiming exemption constituted a valid reason for the delay. Therefore, the penalty for late filing was deemed unjust, and the charges were considered refundable to the appellant.

4. The Tribunal set aside the impugned order rejecting the refund of the penalty amount, allowing the appeal with consequential relief. The decision highlighted the appellant's justified cause for the delay in filing the bill of entry, leading to the refund of the penalty amount imposed.