2024 (8) TMI 619 - AT - Customs

Confiscation of containers imported by the appellants - imposition of redemption fine and penalty - inordinate delay occurred in the adjudication - It is the case of the appellants though there was delay in export of the containers, the delay was not due to the appellants but due to the fact that the containers were under hold by the Department itself - HELD THAT - It is found that the impugned case is at best a case of procedural lapse committed by the appellants. It is found from the records of the case that the appellants have exported 231 containers out of 236 containers as on the date of show cause notice. This being the case, it is not correct on the part of the Revenue to confiscate the containers and to impose redemption fine and penalty. It is found that it was held by the Tribunal in the cases cited by the appellants that the appellants are not liable to pay duty or penalty when the containers are exported. When the containers are accounted for and have been exported, seeking extension or denial of permission are of no consequence. The department has not made any case for confiscation of the containers which are exported and the demand of duty thereof. However, as submitted by the appellants and as acknowledged in the show cause notice 5 containers remain to be exported and even after 14 long years the appellants did not either exported the containers nor sought permission. To this extent the commission of the violations of the appellant are on record - the appellants have rendered themselves to pay duty on the five containers in question and a suitable penalty for the infractions they have committed. The appeal is partly allowed by restricting the duty demand to the five containers in question and by imposing a penalty of ₹ 50,000/- under Section 112 of the Customs Act, 1962 on the appellants. Confiscation and redemption fine imposed on 231 containers already exported is however set aside.

Summary

Issues:
1. Confiscation and redemption fine on containers imported and exported by the appellants.
2. Allegations of illegal proceedings due to delay in adjudication.
3. Applicability of CBEC Circular No. 83/98 and Notification No. 104/94-Cus.
4. Ownership of containers and liability of the agent.
5. Export of containers, permission, and duty implications.
6. Procedural lapses by the appellants and imposition of penalty.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai involved the appellants challenging an order confiscating containers imported and exported, imposing redemption fines, confirming duty, and penalties under the Customs Act, 1962. The case centered on the appellants' failure to export all containers imported within the stipulated period, leading to show cause notices and subsequent adjudication. The appellants argued against the proceedings, citing illegal delays and relying on legal precedents like Lanvin Synthetics Pvt Ltd and Eastern Agencies Aromatics Pvt Ltd. The Tribunal addressed the delay issue and the applicability of CBEC Circular No. 83/98, emphasizing the need for compliance with Notification No. 104/94-Cus.

Regarding ownership of containers, the appellants contended that the agency agreement was no longer in effect, shifting ownership responsibility to the principal. They highlighted discrepancies in the export status of containers, citing cases like Sandur Micro Circuits Ltd and Commissioner of Central Excise, Bolpur. The Tribunal examined the export status, permission requirements, and duty implications, referencing cases such as Commissioner of Customs, Kandla vs. APL (India) Pvt Ltd and Intermark Shipping Agencies Pvt Ltd vs. Central Excise, Customs (A), Kandla.

The Tribunal acknowledged procedural lapses by the appellants but noted that 231 out of 236 containers had been exported. It held that the Revenue's actions of confiscation and imposing fines were unwarranted when containers were accounted for and exported. The judgment referenced previous cases to support the appellants' position on re-export proof acceptance and duty payment obligations. The Tribunal concluded that while penalties were warranted for five unexported containers after 14 years, confiscation and fines on exported containers were unjustified.

In the final ruling, the Tribunal partially allowed the appeal, restricting duty demands to the five unexported containers and imposing a penalty under Section 112 of the Customs Act, 1962. Confiscation and redemption fines on the already exported containers were set aside, emphasizing the procedural and duty compliance aspects of the case.