2021 (12) TMI 296 - HC - Customs

Levy of late fee charges - provision for purging the Bill of Entry either under the provisions of the Customs Act, 1962 or under the Provisions of aforesaid Regulations - validity of second Bill of Entry - Section 46 of the Customs Act, 1961 - HELD THAT - Regulation 4 of the Bill of Entry (Electronic Integrated Declaration and Paperless Procession) Regulations, 2018 has been framed to implement Section 46(3) of the Customs Act, 1962. The practice of purging of Bill of Entry appears to be based on the practice adopted in various ports on account of the architecture of the ICEGATE. There is however no provision either under the Customs Act, 1962 or under the provisions of Regulation which contemplates purging of the Bill of Entry. In the facts of the case, the petitioner has filed a second Bill of Entry on 12.07.2021 and said the necessity for filing second Bill of Entry arose only on account of the fact that the earlier Bill of Entry dated 20.04.2021 got erased in the ICEGATE or the customs system. Therefore, the petitioner could not comply with the requirements regarding the query raised on 20.04.2021. It cannot be ignored that the entire world was under the second wave of Covid 19 lockdowns were being imposed to protect the humanity from the throes of death. India was no exception, only few essential services were allowed to operate. In fact, the expression purging is neither found in the Act nor in the aforesaid Regulation. Therefore, question of imposing late fee chargers merely because an importer files a second Bill of Entry on account of the factors mentioned above would not justify the levy of late fee charges on the petitioner. Further it is noticed that in the impugned communication dated 12.07.2021 an amount of ₹ 8,25,000/- was being demanded as a fine amount and not a late fee in terms of Regulation 4(3) of the Bill of Entry (Electronic Integrated Declaration and Paperless Processing) Regulations, 2018 and Section 46(3) of the Act. This is also clearly contrary to the scheme of the Customs Act, 1962 and Bill of Entry (Electronic Integrated Declaration and Paperless Processing) Regulations, 2018. This writ petition is allowed by quashing the impugned order seeking to levy fine late fee on the petitioner under the provisions of Regulation 4(3) of the Act and Section 46(3) of the Act. The respondents are directed to release the goods which are lying under their control immediately subject to the petitioner paying the requisite Customs duty and the applicable taxes within a period of ten days from the date of receipt of a copy of this order.

Summary

Issues:
1. Justification of late fee charges for a second Bill of Entry.
2. Authority to waive late payment fees under Customs Act and Regulations.
3. Interpretation of provisions regarding purging of Bill of Entry.
4. Discretion of customs officers in granting waivers.
5. Applicability of CBEC Circular and standing orders in granting relief.
6. Availability of alternate remedies for appealing against late fee charges.

Analysis:
1. The primary issue in this case was whether the demand for a late fee of ?8,25,000 for a second Bill of Entry was justified. The petitioner argued that due to lockdowns and office closures during the pandemic, the original Bill of Entry was purged, necessitating the filing of a new one. The court noted that the Customs Act and Regulations do not provide for purging of Bill of Entry, and imposing late fees in such circumstances was deemed unjustified.

2. The petitioner contended that customs officers have the authority to waive late payment fees under the Customs Act and Regulations, especially in cases where factors beyond the importer's control, such as natural calamities or technical issues, are involved. The court agreed that the discretion to grant waivers should be exercised judiciously, considering the circumstances of the case.

3. The interpretation of provisions related to the purging of Bill of Entry was crucial in this judgment. The court observed that the practice of purging Bill of Entry was not explicitly provided for in the Customs Act or Regulations. The petitioner's need to file a second Bill of Entry due to the purging of the original one was considered valid, given the extraordinary circumstances of the pandemic.

4. The court emphasized the importance of customs officers using their discretion appropriately to provide relief to importers in bona fide cases. The petitioner cited CBEC Circulars and standing orders that advised customs officials to identify cases where late filing was not the importer's fault and to grant suitable relief. The court upheld the petitioner's argument for granting a waiver in this case.

5. The relevance of CBEC Circulars and standing orders in providing relief to importers was highlighted during the proceedings. The court acknowledged the instructions that aimed to prevent undue hardship to traders and stakeholders, emphasizing the need for customs officials to consider genuine reasons for late filings before imposing penalties.

6. Lastly, the respondents argued that the petitioner should have pursued alternate remedies, such as filing an appeal before the Appellate Commissioner, instead of seeking relief through a writ petition. However, the court found in favor of the petitioner, quashing the order for late fee charges and directing the release of goods upon payment of customs duty and taxes within a specified period.

In conclusion, the court allowed the writ petition, setting aside the imposition of late fee charges and directing the release of goods upon payment of duties and taxes. The judgment underscored the need for customs authorities to exercise discretion judiciously and consider exceptional circumstances, such as those arising from the COVID-19 pandemic, when dealing with late filings of Bill of Entry.