9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 326 - HC - CustomsLevy of penalty CFS / Customs Cargo Service Provider (CCSP) Loss of revenue - on Smuggling - Red Sanders - Recovery of value of the lost goods from the Appellant - goods were pilfered - penalty under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations, 2009 - levy of penalty under Section 117 of the Customs Act, 1962 - simultaneous penalty on the Appellant under Regulation 12(8) of the HCCAR and Section 117 of the Customs Act, 1962 for the same contravention. HELD THAT - The opening words of Regulation 5 itself makes the provision mandatory when it uses the word shall fulfill the following conditions . It is manifest that sub-regulations (2), (5) and (6) of Regulation 5 are in the nature of undertakings. Regulation 5(6) clearly provides that the CFS is required to indemnify the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, from any liability arising on account of damages caused or loss suffered on imported or export goods, due to accident, damage, deterioration, destruction or any other unnatural cause during the receipt of the goods, storage, delivery, dispatch or otherwise handling. Thus, Regulation 5(6) is quite widely worded, so as to take into account different situations, so as to cover not only the liability arising on account of damages, but also, loss suffered on imported or export goods, which may be on account of factors like accident, damage, deterioration, destruction or any other unnatural cause. The phrase any other unnatural cause would mean any cause other than the natural cause. Applying Regulation 5(6) to the facts of the present case, it is not in dispute that there is an undertaking on the part of the CFS to indemnify the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, inter alia in regard to the loss suffered, and in the present case on export goods, by an unnatural cause, during storage of goods. Once the appellant was bound by such undertaking as contemplated by Regulation 5(6) and having consciously accepted the fact that the goods worth Rs. 4,44,32,500/- have been stolen/pilfered, then certainly statutory obligation under Regulation 5(6) kicks in, so as to make the appellant liable to indemnify the said loss of goods which had occurred due to theft of the goods. On a plain reading of Section 117 of the Customs Act, it is quite clear that the provision pertains to penalties for contravention of the provisions of the Act or in the event of abetment of any such contravention and /or failure to comply with the provisions of the Act, with which the person was under a duty to comply and where no express penalty elsewhere is provided for such contravention or failure, it is only in that event, Section 117 can be invoked. Thus, Section 117 of the Customs Act is an independent provision inter alia dealing with the contravention of the provisions of the Act - In the facts and circumstances of the present case, the Commissioner was justified in imposing a penalty for contravention of the provisions of Customs Act by the appellant in relation to the goods in question. Also the appellant has not raised a dispute, as the contention of the appellant is that there cannot be a simultaneous penalty under Section 117 of the Customs Act and Regulation 12(8) of the 2009 Regulations. Thus, no fault can be found on the penalty of Rs. 4,00,000/- as imposed under Section 117. Penalty under Regulation 12(8) - HELD THAT - Regulation 12(8) of the 2009 Regulation mandates that if the Custom Cargo Service Provider (appellant in the present case) contravenes any of the provisions of the said Regulations or abets such contravention or fails to comply with any provisions of the regulation with which it was his duty to comply, then he shall be liable to a penalty which may extend to fifty thousand rupees. In the present case, there is a clear contravention of Regulation 5 and Regulation 6, hence, the penalty under Regulation 12(8) cannot be faulted. The appeal is without merit, it is accordingly dismissed.
Issues Involved:
1. Applicability of Regulation 5(6) of the Handling of Cargo in Customs Area Regulations, 2009 for recovery of the value of lost goods. 2. Imposition of penalty under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations, 2009. 3. Imposition of penalty under Section 117 of the Customs Act, 1962. 4. Simultaneous imposition of penalties under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations, 2009, and Section 117 of the Customs Act, 1962 for the same contravention. Summary: Issue 1: Applicability of Regulation 5(6) for Recovery of Lost Goods The court examined whether Regulation 5(6) of the Handling of Cargo in Customs Area Regulations, 2009, entitles the Respondent to recover the value of the lost goods from the Appellant. The appellant contended that the regulation does not cover situations where goods are pilfered or stolen. However, the court noted that Regulation 5(6) mandates the Customs Cargo Service Provider (CCSP) to indemnify the Commissioner of Customs for any loss suffered on imported or export goods due to unnatural causes, including theft or pilferage, during their storage. The court held that the appellant, being bound by this regulation, is liable to indemnify the Commissioner for the loss of goods valued at Rs. 4,44,32,500/-. Issue 2: Imposition of Penalty under Regulation 12(8) The court reviewed the imposition of a penalty of Rs. 50,000/- under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations, 2009. The regulation stipulates that any contravention of its provisions by the CCSP attracts a penalty. Given the appellant's failure to ensure the safety and security of the goods, the court upheld the penalty, noting clear contraventions of Regulation 5 and Regulation 6. Issue 3: Imposition of Penalty under Section 117 of the Customs Act, 1962 The court considered the imposition of a penalty of Rs. 4,00,000/- under Section 117 of the Customs Act, 1962, which applies to contraventions of the Act where no specific penalty is provided. The court found that the appellant's actions constituted a breach of the Customs Act, justifying the penalty. Issue 4: Simultaneous Imposition of Penalties The appellant argued against the simultaneous imposition of penalties under Regulation 12(8) and Section 117. The court clarified that Section 117 is an independent provision addressing contraventions of the Customs Act, while Regulation 12(8) pertains specifically to breaches of the Handling of Cargo in Customs Area Regulations. Thus, both penalties were found to be justified and not mutually exclusive. Conclusion: The court dismissed the appeal, affirming the appellant's liability to indemnify the Commissioner for the loss of goods and upholding the penalties imposed under both Regulation 12(8) and Section 117. The interim application was also disposed of accordingly.
|
