2005 (2) TMI 291 - AT - Customs

Summary

Issues:
1. Duty liability on the actual length of cable laid under sea for a project.
2. Duty liability on imported cables used for repairs/replacement.
3. Imposition of penalty under Section 114A of the Customs Act, 1962.

Issue 1: Duty liability on the actual length of cable laid under sea for a project:
The appellant, M/s. VSNL, entered into a consortium for a project involving laying cables under the Sea Communication Cable. The appellant filed Bills of Entry and paid duty on the terrestrial and declared undersea length of cables. However, subsequent investigations revealed the actual length laid was more than declared. The tribunal held that the duty liability on the actual length of cable laid under sea rests with the importer, M/s. VSNL, as they filed Bills of Entry. The argument of the project being within the knowledge of Customs does not absolve M/s. VSNL from duty payment on the additional length used. The tribunal upheld the duty demands on the freshly laid cables.

Issue 2: Duty liability on imported cables used for repairs/replacement:
M/s. VSNL was aware of repairs and replacement work on existing undersea cables and supervised the process. The tribunal found M/s. VSNL not innocent of duty liability on imported cables used for repairs/replacement. As no declaration was made for these quantities in the Bills of Entry, the duty demand on cables used for replacing old cables was upheld. The Commissioner's order confirming the duty demand was deemed valid and upheld by the tribunal.

Issue 3: Imposition of penalty under Section 114A of the Customs Act, 1962:
The tribunal noted that the penalty imposed under Section 114A, introduced in 1996, for imports in 1993, cannot have a retrospective effect. Therefore, the tribunal set aside the penalty imposed under Section 114A. Referring to previous decisions, the tribunal considered M/s. VSNL as a Public Sector Undertaking and granted the benefit of decisions where harsh penalties were not imposed on such entities. As the penalty under Section 114A was not upheld, the tribunal did not remand the case for further adjudication of penalty under Section 112 of the Customs Act, 1962.

In conclusion, the tribunal upheld duty demands on the actual length of cables laid under sea and on imported cables used for repairs/replacement. The penalty imposed under Section 114A was set aside, considering the non-retrospective nature of the penal clause and granting benefits to M/s. VSNL as a Public Sector Undertaking. The appeals were disposed of accordingly.