2021 (1) TMI 767 - AT - Customs

Levy of penalty under regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 - levy on the ground that the appellants had not submitted all the import documents, timely, as was required to be filed within 30 days in terms of regulation 3(3) of the Regulations - HELD THAT - This is a case of delay in furnishing of certain documents. There is no revenue implication. The department has not been able to establish any deliberate delay or any malafide intention on the part of the appellant. As and when the appellant could gather the requisite documents they were presented before the assessing officers for finalising the provisional assessments. In fact, out of the 35 Bills of Entry involved, 27 could be finalised even before passing of the adjudication order. Keeping all this in view, the adjudicating authority took a fair decision and imposed a nominal penalty of ₹ 20,000/- which comes to ₹ 2,500/- for each of the remaining 8 Bills of Entry yet to be finalised for want of all the documents. This amount has already been paid by the appellant. The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of ₹ 50,000/- per Bill of Entry yet to be finalised. In the case of Essar Oil Ltd. vs Commissioner of Customs (Prev), Jamnagar 2015 (5) TMI 942 - CESTAT AHMEDABAD , it was held by the Tribunal that when there is some delay in furnishing the documents and there is no revenue implication, penalty is not called for. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalty imposition under Regulation 5 of the Customs (Provisional Duty Assessment) Regulations, 2011 for delay in submission of import documents.

Analysis:
The case involved M/s Jai Balaji Industries Ltd., which imported coal through Dhamra Port in Odisha on a high sea sale basis. Due to the nature of the purchase, the import documents like commercial invoice, bill of lading, etc., could not be filed initially, leading to provisional assessment of Bills of Entry under section 18 of the Customs Act, 1962. The appellant executed a bond with a bank guarantee as required by the Regulations. Over a period of 3 years, 35 Bills of Entry were filed and provisionally assessed. The Department issued a show cause notice proposing a penalty under Regulation 5 of the Regulations for not submitting all documents within the specified time frame.

In response, the appellant admitted slight delays in document submission and requested condonation of the delay. By the time of adjudication, most documents were submitted, and only 8 Bills of Entry remained pending finalization. The adjudicating authority imposed a penalty of &8377; 20,000, which the appellant paid without challenge. However, the Department appealed, leading to the Commissioner (Appeals) enhancing the penalty to &8377; 4,00,000 (&8377; 50,000 per remaining Bill of Entry). The appellant contested this decision before the Tribunal.

The appellant argued that the penalty was unjustified as there was no revenue implication, and the delays were procedural in nature. They highlighted that the department did not allege deliberate delay or malafide intentions. The appellant also emphasized that they sought condonation for the delay and submitted documents as soon as they were procured. They cited precedents where penalties were not imposed for procedural lapses.

After hearing both sides, the Tribunal found that the delays were procedural, with no revenue impact, and no evidence of deliberate delay or malafide intent. The adjudicating authority's decision to impose a nominal penalty of &8377; 20,000 was considered fair, given the circumstances. The Tribunal referenced a precedent where penalties were deemed unnecessary in cases of delay without revenue implications. Consequently, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and reinstating the Original Authority's decision.

In conclusion, the Tribunal's judgment focused on the procedural nature of the delays, the absence of revenue implications, and the lack of evidence supporting the enhanced penalty. The decision underscored the importance of fair and proportionate penalties in cases of procedural lapses without deliberate delays or revenue impact.