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2025 (2) TMI 275 - AT - CustomsImposition of penalty for non-submission of the documents as per Regulation 5 of the Customs (Provisional Duty Assessment) Regulations 2011 - HELD THAT - From the records it is seen that the appellant has imported goods vide 21 Bills of Entry and there was a delay in submission of the documents only in respect of four Bills of Entry for finalisation of the provisional assessments. Subsequently they have submitted all the documents in respect of the remaining four Bills of Entry also and they have been finalised. As there was a delay in submission of documents in respect of four Bills of Entry the Department initiated proceedings for imposition of penalty under Regulation 5 of the above said Regulations 2011. In the case of M/S JAI BALAJI INDUSTRIES LTD. VERSUS COMMR. OF CUSTOMS (PREVENTIVE) BHUBANESWAR 2021 (1) TMI 767 - CESTAT KOLKATA this Tribunal has held that The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of Rs. 50, 000/- per Bill of Entry yet to be finalised. The penalty of Rs.15, 000/- imposed by the Assistant Commissioner would be sufficient to meet the ends of justice - the enhanced penalty set aside - appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issue in this case is the imposition of a penalty for the appellant's failure to submit necessary documents within the stipulated time frame for the finalization of provisional assessments, as per Regulation 5 of the Customs (Provisional Duty Assessment) Regulations, 2011. Specifically, the Tribunal considered whether the enhancement of the penalty from Rs.15,000/- to Rs.2,00,000/- by the Commissioner (Appeals) was justified. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The Customs (Provisional Duty Assessment) Regulations, 2011, particularly Regulation 5, governs the imposition of penalties for delays in document submission necessary for finalizing provisional assessments. The maximum penalty prescribed is Rs.50,000/-. The appellant cited the case of Jai Balaji Industries Ltd. v. Commissioner of Customs (Preventive), Bhubaneswar, where it was held that penalties should not be enhanced to the maximum without establishing deliberate delay or mala fide intention. Court's interpretation and reasoning: The Tribunal noted that the appellant had submitted all required documents for 17 out of 21 Bills of Entry and that the remaining documents were submitted with only a slight delay. The Tribunal emphasized that the delay did not have any revenue implications, nor was there any evidence of deliberate delay or mala fide intention by the appellant. The Tribunal referred to the precedent set in Jai Balaji Industries Ltd., where similar circumstances led to the imposition of only a nominal penalty. Key evidence and findings: The Tribunal found that the appellant had indeed submitted all necessary documents, albeit with a delay for four Bills of Entry. The finalization of all 21 Bills of Entry had been completed, indicating compliance by the appellant. The Tribunal also noted that the appellant had already paid the penalty of Rs.15,000/- initially imposed by the adjudicating authority. Application of law to facts: Applying the legal framework to the facts, the Tribunal concluded that the circumstances of the case did not warrant an enhanced penalty. The delay in document submission was procedural, with no adverse revenue implications. The Tribunal found that the original penalty of Rs.15,000/- was adequate to address the procedural lapse. Treatment of competing arguments: The Tribunal considered the Revenue's argument that timely submission of documents is crucial for the finalization of provisional assessments and the realization of duty liabilities. However, the Tribunal found that the delay did not result in any revenue loss or demonstrate any intentional wrongdoing by the appellant. The Tribunal favored the appellant's position, supported by the precedent in Jai Balaji Industries Ltd., that the penalty should be proportionate to the procedural lapse without evidence of deliberate intent. Conclusions: The Tribunal concluded that the enhancement of the penalty to Rs.2,00,000/- was not justified. The original penalty of Rs.15,000/- was deemed sufficient to address the procedural delay in document submission. SIGNIFICANT HOLDINGS The Tribunal held that the case was covered by the precedent in Jai Balaji Industries Ltd., where penalties should not be enhanced without evidence of deliberate delay or mala fide intent. The Tribunal stated, "I find that the penalty of Rs.15,000/- (Rupees Fifteen Thousand only) imposed by the Assistant Commissioner would be sufficient to meet the ends of justice." This holding underscores the principle that penalties should be proportionate and based on the nature of the procedural lapse. The Tribunal set aside the enhanced penalty and allowed the appeal, restoring the original penalty imposed by the adjudicating authority.
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