2021 (11) TMI 664 - AT - Customs

Levy of penalty - Regulation 12(8) of Handling Cargo in Customs Area Regulation, 2009 - Section 117 of the Customs Act - proper appreciation of the submissions, averments or not - non-application of mind - violation by the appellant of Regulations or Regulation 12(8) of HCCAR, 2009, or of any of the provisions of the Customs Act - principles of natural justice - HELD THAT - The appellant have bonafide issued Public Notice dated 16.05.2017, which is also in due compliance of law, as the learned SDM of the State Government is empowered to maintain law and order, which also includes safety of the people living under his jurisdiction. Further, it is found that the appellant have evidently issued the Public Notice as well as moved containers containing hazardous goods from ICD, Tuglakabad under the direction of the learned SDM, duly confirmed by the Hon ble High Court in its interim order. Accordingly, it is held that the appellant have not violated any of the provisions of HCCAR, 2009 and/or of the Customs Act. Accordingly, this appeal is allowed and the impugned order is set aside. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Imposition of penalties under Regulation 12(8) of Handling Cargo in Customs Area Regulation, 2009 (HCCAR) and Section 117 of the Customs Act.
2. Compliance with the responsibilities and conditions under the Customs Act and HCCAR by Container Corporation of India Limited (CONCOR).
3. Legality of the public notice issued by CONCOR restricting handling of hazardous cargo at ICD, Tughlakabad.
4. Adherence to the orders of the State Divisional Magistrate (SDM) and subsequent High Court directions.

Detailed Analysis:

1. Imposition of Penalties:
The appellant, CONCOR, challenged the imposition of a penalty of ?50,000 under Regulation 12(8) of HCCAR and ?1 lakh under Section 117 of the Customs Act. The penalties were imposed by the Commissioner on the grounds that CONCOR violated the customs regulations by issuing a public notice and redirecting hazardous cargo without proper authorization.

2. Compliance with Customs Act and HCCAR:
Section 141 of the Customs Act mandates that imported or exported goods must be handled in a prescribed manner in customs areas, with specific responsibilities for those engaged in these activities. The HCCAR, 2009, outlines the conditions and responsibilities for 'Customs Cargo Service Providers' (CCSP), including the safe storage of hazardous chemicals. CONCOR, as the custodian at ICD, Tughlakabad, is required to comply with these regulations and has executed relevant bonds and undertakings.

3. Legality of Public Notice:
On 16.05.2017, CONCOR issued a public notice restricting the handling of hazardous cargo at ICD, Tughlakabad, following an incident on 06.05.2017 where hazardous gas leaked from a truck outside the ICD premises. The public notice was issued in compliance with the SDM's order dated 09.05.2017, which directed the removal of hazardous materials and submission of a disaster management plan. The Customs Department objected to this notice, stating it was issued without proper authorization and violated HCCAR and Customs Act provisions.

4. Adherence to SDM and High Court Orders:
The SDM's order was challenged by CONCOR in the Delhi High Court, which stayed parts of the SDM's order that required the phased release of all containers and the prohibition of new containers at ICD, Tughlakabad. The High Court acknowledged the necessity of proper precautions for hazardous cargo but also recognized the economic importance of the ICD. The High Court directed that hazardous cargo should be managed as per the disaster management plan and allowed the continuation of operations with safety measures.

Tribunal's Findings:
The Tribunal found that CONCOR acted in compliance with the SDM's directions and the High Court's interim order. The issuance of the public notice and the movement of hazardous containers were done bona fide and under legal directives. The Tribunal concluded that CONCOR did not violate any provisions of HCCAR, 2009, or the Customs Act. Consequently, the penalties imposed were set aside, and the appeal was allowed with consequential benefits to CONCOR.

Conclusion:
The Tribunal's judgment emphasized that CONCOR's actions were legally justified and in compliance with the SDM's and High Court's orders. The penalties imposed by the Commissioner were deemed unwarranted, and CONCOR was found to have fulfilled its responsibilities under the Customs regulations. The appeal was allowed, and the penalties were annulled.

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