2017 (11) TMI 44 - AT - Customs

Penalty u/s 117 of CA, 1962 on CHA - Short paid duty by importer - Held that - there is no lapse on the part of the appellant as the changes were not updated in the system and the appellants have only filed a Bill of Entry on behalf of their client and they have taken proper care to file the Bill of Entry and therefore there is no lapse on their part so as to impose penalty for the fault of the system which has not been updated as on the date of filing of the Bill of Entry - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of penalty under Section 117 of the Customs Act 1962 for short payment of duty due to discrepancy in tariff value declaration.

Analysis:
The appeal was filed against an order imposing a penalty of Rs. 50,000 on the appellant under Section 117 of the Customs Act 1962 for a case involving the clearance of Gold Bars with a discrepancy in the declared tariff value. The appellant, a Customs Broker, filed a Bill of Entry based on an authorization by the importer, M/S. Indus Ind Bank Ltd., Bangalore, declaring a tariff value of USD 449/10 Grams. However, the department noted that the correct tariff value was USD 472/10 Grams as per Notification No. 50/2013 Cus. dated 26.04.2013, resulting in a short payment of Rs. 30,98,651. The show-cause notice alleged that both the importer and the appellant were aware of the duty increase but failed to inform the department, leading to the penalty imposition.

The appellant argued that the system did not reflect the amended tariff value due to a delay in uploading the amendment to Notification No. 39/2015 Cus. on 04.12.2015. The appellant claimed that they advised the importer to pay the differential duty, which was subsequently paid along with interest and a reduced penalty. The department contended that the impugned order was justified.

Upon review, it was found that the system's failure to update the amended tariff value led to the underpayment of duty. The appellant promptly notified the importer to pay the differential duty, which was duly paid along with interest and a reduced penalty. The Tribunal concluded that there was no fault on the appellant's part, as they diligently filed the Bill of Entry on behalf of the client. Additionally, it was noted that the penalty under Section 117 was imposed despite the initial proposal to impose it under Section 112(a). As a result, the Tribunal held that the impugned order was not legally sustainable and set it aside, allowing the appeal of the appellant.

This detailed analysis of the judgment highlights the key arguments, findings, and legal reasoning involved in the case regarding the imposition of a penalty under Section 117 of the Customs Act 1962 due to a discrepancy in the declared tariff value.