2021 (7) TMI 763 - AT - Customs

Levy of penalty u/s 117 of CA - non-filing of EGM/shipping bills as required under section 41 of the Customs Act, 1962 - problem of EGM errors which hamper IGST refund processing - HELD THAT - Section 41 thus cast duty upon the person in-charge of conveyance/carrier to file the EGM in relation to the goods which are exported. In case of any omission or error in filing documents, the law provides for opportunity to correct the same. It has to be seen that the proper officer of the Customs has to first verify whether the goods have reached the port. So also, the proper officer has to verify whether the documents regarding the export have been filed including the shipping bills. Only after such verification, the let export order or out of charge is issued. If LEO was issued without EGM being filed, it would imply that the proper officer has endorsed the fact of non-filing of EGM/shipping bill, which may be due to oversight on his part. In any case, there is no allegation of fraud or wilful suppression of documents. So also, there is no allegation in respect of the nature and quantity of the goods exported - Moreover, the appellant has stated that during the relevant period there was no facility to know whether the documents have been correctly uploaded. Later, the department has improved their data-base by including such facility. In such circumstances, the non-filing of shipping bill is a condonable lapse. In Circular No.1/2019-Cus., F.No.450/119/2017-Cus-IV, dated 02.01.2019, the department has put forward resolutions to solve the problem of EGM errors which hamper IGST refund processing. In the present case also, in Para 11 of O-in-O, it is seen stated that the IGST refund claim for these impugned shipping bills could not be processed and delivered to the exporter in time. In the present case, on receiving notice from department, the appellant has immediately rectified the defect. There is no allegation of continued non-compliance - the penalty imposed is unwarranted - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Non-filing of Export General Manifest (EGM) in respect of shipping bills; Imposition of penalty under section 117 of Customs Act for contravening section 41 of the Customs Act, 1962; Reduction of penalty by Commissioner (Appeals); Appeal before the Tribunal.

Analysis:
The appellant failed to file EGM for several shipping bills, leading to a show-cause notice proposing penalties under section 117 of the Customs Act for contravening section 41. The original authority imposed a penalty of ?1 lakh per shipping bill, later reduced to ?30,000 by the Commissioner (Appeals), prompting the appellant's appeal before the Tribunal.

On behalf of the appellant, it was argued that the omission was due to oversight, as more than 600 shipping bills were filed, and there was no fraudulent intention. The appellant lacked access to verify document uploads at the time, and the error was rectified promptly upon identification. The department contended that the penalties were justified due to the carrier's responsibility to file EGM before departure.

The penalties were imposed for non-filing of EGM/shipping bills as required by section 41 of the Customs Act, 1962. The law allows for amending incorrect or incomplete documents under section 41(3), indicating foreseeability of errors. The delay in initiating proceedings and lack of fraudulent intent were noted, emphasizing the carrier's duty to file EGM.

A circular highlighted resolutions to address EGM errors affecting IGST refund processing, indicating that penal provisions were not to be invoked until a specified date. The appellant rectified the error promptly upon notification, and the penalty was deemed unwarranted due to lack of continued non-compliance. The circular's binding nature on the department was emphasized, leading to the setting aside of the penalty and allowance of the appeals with consequential reliefs.