2024 (11) TMI 1237 - AT - Customs

Enhancement of Composite penalty - appellant did not submit the documents with regard to 6 Bills of Entry - penalty of Rs. 40000/- has been enhanced to Rs. 3,00,000/- - Adjudicating Authority imposed a penalty under Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 - appellant submits that although they have not filed the documents in time but later on the documents were filed - HELD THAT - As relying on the decision of Shyam Steel Industries Ltd. 2024 (1) TMI 473 - CESTAT KOLKATA wherein held reduced penalty can be imposed for such procedural violations. Thus penalty of Rs. 40,000/- imposed by the Adjudicating Authority shall meet the end of justice.

Summary

Issues:
Imposition of penalty under Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 for non-submission of documents.

Analysis:
The appellant had filed 77 Bills of Entry for goods clearance, with assessment initially done provisionally. Subsequently, documents for 71 Bills were submitted and finalized, while 6 Bills remained pending due to missing documents. The Adjudicating Authority imposed a penalty of Rs. 40,000 under Regulation 5 for the 6 Bills. The Revenue challenged this, leading to the Commissioner (Appeal) enhancing the penalty to Rs. 50,000 per Bill of Entry. The appellant argued that although documents were delayed, they were eventually submitted, hence no penalty should apply. The appellant cited the case of M/s. Shyam Steel Industries Ltd. in support. The Adjudicating Authority defended the penalty.

The Tribunal noted that the issue revolved around the penalty for non-submission of documents under Regulation 5. While most documents were filed on time, a delay occurred in submitting documents for 6 Bills of Entry. The Adjudicating Authority imposed a penalty of Rs. 40,000 in accordance with the Regulations. Referring to the decision in the case of Shyam Steel Industries Ltd., the Tribunal emphasized that penalties for procedural violations should be reasonable and proportionate. The Tribunal highlighted that penalties should consider factors like revenue implications, deliberate delays, and mala fide intentions. In this case, the appellant had eventually submitted the necessary documents, and a penalty of Rs. 5,000 was deemed sufficient to meet the ends of justice. The Commissioner (Appeal) had not provided adequate reasoning for increasing the penalty to Rs. 50,000 per Bill of Entry.

Based on the cited judgment and the principles discussed, the Tribunal set aside the enhanced penalty imposed by the Commissioner (Appeal) and held that the penalty of Rs. 40,000 imposed by the Adjudicating Authority was appropriate. Consequently, the enhancement of penalty by the Commissioner (Appeal) was deemed unwarranted and set aside. The appeal was disposed of accordingly.