2024 (1) TMI 591 - AT - Customs

Liability of Duty-Free Shop to pay duty - Clearnce of goods from private bonded warehouse - case of appellant is that they are not liable to pay duty under Section 72 but the duty needs to be collected from the passengers and hence, demand against them is liable to be set aside - HELD THAT - The licensee of the Duty-Free Shop is liable to pay duty, if the provisions of Sections and the Procedures laid down therein, are violated and therefore, the question of passengers paying duty does not arise. This has also been affirmed by the Tribunal in the case of Alpha Future Airport Retail P. Ltd. 2017 (10) TMI 1198 - CESTAT NEW DELHI which has been upheld by the Supreme Court in AIRPORT RETAIL PVT. LTD. Versus COMMR. OF CUSTOMS (AIR CARGO EXPORTS) , NEW DELHI 2021 (10) TMI 998 - Supreme Cour . The Tribunal has clearly held that the provisions of Section 72 are applicable to the appellant and they are liable for duty along with interest. In view of the above, the duty along with interest is upheld. With regard to penalty as rightly observed by the Original Authority, there is no intention to evade payment of duty and the fact that the officers are also to verify the vouchers and countersign the sale vouchers, the fact of awareness by the officers cannot be ignored and hence, the penalty is set aside. The duty demanded along with interest is upheld and the penalty is set aside - Appeal allowed in part.

Summary

Issues involved: Violation of provisions of Section 72 of the Customs Act, 1962 and Trade Facility No.50/2005 regarding a promotional offer for sale of liquor at a duty-free shop.

Summary:
1. The appellant, a Private Bonded Warehouse operator, violated Trade Facility No.50/2005 by launching a promotional offer without informing Customs Authorities, leading to a demand for customs duty. The appellant accepted the lapse and paid the demanded amount. The Original Authority confirmed the demand, interest, and imposed a penalty. The Commissioner (Appeals) upheld this decision, prompting the appellant's appeal against the order.

2. The appellant argued that duty should have been demanded from passengers under Section 28, not from them under Section 72. They cited relevant sections of the Customs Act and previous case laws to support their claim. The appellant emphasized that there was no intention to evade customs duty, hence no penalty should be imposed.

3. The Authorized Representative supported the Commissioner (Appeals) findings, citing a Tribunal case where a licensee was held liable for customs duty due to violations of bond conditions.

4. After examining relevant sections of the Customs Act and Trade Facility No.50/2005, it was found that the appellant failed to comply with statutory requirements regarding the promotional offer. The appellant's obligation to account for bonded goods to customs satisfaction was not met. The duty was upheld to be paid by the appellant, not the passengers. However, the penalty was set aside due to lack of intention to evade duty and the involvement of customs officers in verifying sales vouchers.

5. The duty demanded along with interest was upheld, while the penalty was set aside.