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TMI Blog2012 (10) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... lity/responsibility of the applicant for depositing the same and therefore in contravention thereof the applicant was liable to pay all the legally imposable penalties for such delays - If one goes through the order of remand, one would find that it was not a limited remand - remand was to enable the adjudicating authority to consider all the issues after affording opportunity of personal hearing to the petitioner - Show Cause Notices were restored to the file of the adjudicating authority for consideration afresh. It was not a limited remand - it was open for the adjudicating authority to enhance the amount of penalty in consonance with the provision of sub-section (3) of section 38 of the Act. - F. No. 371/8/FTT/2008-RA-CUS - 401/2010-Cus - Dated:- 19-11-2010 - Shri D.P. Singh, J. REPRESENTED BY : Shri Manoj S. Seklecha and Shri Ruston Mulla Advocates, for the Appellant. [Order]. The Revision Application filed by M/s. British Airways, PLC, Mumbai against the Order-in-Appeal No. 209/2005 B, dated 11-10-2005 passed by the Commissioner of Customs (Appeals) CSI Airport, Mumbai was rejected as time barred vide this authority s G.O.I. order No. 141/09-Cus., dated 2-7-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Customs by an Order dated 29th March, 2000 adjudicated the three Show Cause Notices and imposed a penalty of Rs. 18,00,000/- under Section 38(3) (4) of Finance Act, 1979 and imposed penalty of Rs. 15,000/- under Rule 10A of the F.T.T. Rules, 1979. Being aggrieved by the above Orders the applicant filed an appeal before the Commissioner of Customs (Appeals). By an Order dated 7th January, 2003 the Commissioner of Custom (Appeals) set aside the Order dated 29th September, 2000 on the ground that imposition of penalty under Section 38 of the said Act was bad-in-law as the above provision was not invoked in the Show Cause Notices. 2.3 On 6th March 2004, the Assistant Commissioner of Customs issued three Show Cause Notices for the alleged offences of late deposit during the months of October 1996, January 1997 and September, 1997. By all the three Notices the Applicant was called upon to show cause why penalty should not be imposed under Section 38(3) of the said Act, for contravention of Section 35(2) of the said Act and Rule 4 of the said Rules for he delay in depositing the Foreign Travel Tax collected for the months of October, 1996, January, 1997 and September, 1997. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for condonation of delay, which the Revisional Authority may consider it on its own merits, including the maintainability thereof in accordance with law. All contentions on this count as well as on merits are kept open. It is expected on the part of the Revisiotial Authority to decide the petition with expeditious dispatch at any rate within 3 months from the receipt of the copy of this order. For compliance of above orders in W.P. No. 63/2010 by the Hon ble High Court of Bombay, the case matter was taken up for de novo proceedings and the personal hearings were scheduled on 28-9-2010 and 21-10-2010. On 21-10-2010, Sh. Manoj S. Seklecha Sh. Ruston Mulla Advocates, appeared for and on behalf of the applicants and while stating that their initial Government of India revision order was set aside by the Hon ble High Court of Bombay with the directions of consider the contention of the applicant regarding time bar aspect afresh made detailed submissions on time-bar aspect as well as on merits. They submitted a written brief also. Their submission as under :- 3.1 On the out set the applicant denied having received the impugned Order-in-Appeal dated 11-10-2005 by post but sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, on the aforesaid ground alone the present proceeding commenced by Show Cause Notices dated 6th March, 2004 is barred on the ground of res judicata or principles analogous to res judicata. (b) It is submitted that there is no period prescribed for imposing penalty for violations of the said Act yet once the Department issues a show Cause Notice, then no further proceedings can be taken to impose any penalty under the said Act as the power to issue any further notice to impose any penalty comes to an end. Therefore, a subsequent Notice on a ground which could have been raised earlier for imposition of penalty is barred as the proceedings for imposition of penalty have already commenced when the earlier Show- Cause Notices were issued. It is not open to the dept. to keep on issuing subsequent notices for the same alleged offences on the ground that there is no period of limitation to issue penalty. 3.3 The alleged offences of late deposit of Foreign Travel Tax occurred in the year 1996-97. Therefore, the penalty which could be imposed upon the Applicant could only be those which were imposable at the time the alleged offence was committed. (a) In the year 1996-97, Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt Cases, Page 16, paragraph 25 26 wherein while construing wording identical to the present amendment viz. They shall come into force on the date of their publication in the Official Gazette the Court held that the amendment would only have prospective effect and cannot be applied retrospectively for offences committed earlier. Attention was also invited to the decision of the Supreme Court cases in the matter of A.A. Calton reported in 1983, 3 Supreme Court cases has held that if the State desired that the amendment ought to be given a retrospective effect, then the same would have been specifically provided for as otherwise the amendment can only operate prospectively. In the circumstances, it is submitted that penalty in excess if Rs. 5,000/- for imposing penalty under Section 38 of the said Act 1979 can only be at the highest of Rs. 5,000/- during the year 1996-97 i.e. prior to October, 2003. 3.4 The delay in depositing the Foreign Travel Tax was due to a mistake and not on account of any guilty mind. In the circumstances no penalty is imposable. It is submitted that as there is no mens rea on the part of the Applicant no penalty ought to have been imposed, under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the matters of Ved Prakash Gupta reported in 1984 (2) SCC 569 and M.P. State Agro Industries reported in 2007 (10) SCC 88 (Para 7). 3.9 That even if the statute does not provide for any period of limitation to impose penalty yet the power to impose penalty must be exercised within a reasonable period of the alleged offence. In the facts of the present case the alleged breaches were committed in 1996-97 while the present Show Cause Notice (leading to this application) to impose penalty under Section 38 of the Finance Act, 1979 was issued only in 2003. The reasonable period in this case would be two years from the alleged breach as that is the period provided for in terms of Rule 7 of Foreign Travel Tax Rules, 1979. This has been so held in the context of Central Excise Law in the matter of Hari Concast (P) Ltd. reported in 2009 (242) E.L.T. 12 while following the Supreme Court decision in the matter of Bhatinda Dist. Co-operative Milk Producers reported in 2007 (217) E.L.T. 325. 4. The Respondent Department while reitrating their earlier stand/submissions as are on record of this office as well as before Hon ble High Court in this matter has placed reliance on below mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either Section 27 of the General Clauses Act, 1897 or any other case law on this issue in such a given situation. Moreover a demand notice based on Order-in-Appeal dated 11-10-2005 was issued on 12-5-2006 and the same was received by an applicant on 12-5-2006. Subsequently reminders were also issued on 13-2-2007 and 25-6-2007 which were received by applicant on 15-2-2007 and 25-6-2007 respectively. Advocates for applicants requested for copy of Order-in-Appeal dated 11-10-2005 vide their letter dated 4-7-2007 which was supplied to them. Government therefore neither finds any reason nor is convinced with plea of the applicant that they have received the impugned order only after a gap of two years i.e. on 4-10-2007 personally through their advocate. 7. As per Rule 15 of the Foreign Travel Tax Rules, 1979, any person aggrieved by any order passed under Rule 13 or Rule 14, shall make an application within six months from the date of communication of order to the applicant, to the Central Govt. for revision. Provided that the Central Govt. may if it is satisfied that the applicant was prevented by sufficient cause for presenting the application within the aforesaid period of six mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices were issued on 6-3-2004 in pursuance of the impugned Order-in-Appeal dated 11-10-2005 and were adjudicated on 9-11-2004, therefore, obliviously the amended provisions of applicable statute were applicable while issuing Show Cause Notices and adjudicating the cases. In this regard it is also mentioned here that where, the penalty imposed has been prescribed in the Section/Rule itself by virtue of statute, the authorities working under that statute cannot be against it or dilute it. In Customs and Central Excise matters, there are many such Sections/Rules where the penalty has been prescribed by statute itself. As per Section 11AC of the Central Excise Act, 1944 Penaly for short levy or non-levy of duty in certain cases where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of Section 11A, shall also be liable to pay a penalty equal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te can not go against it and if the penalty has been prescribed in the Section itself, it becomes a mandatory penalty to be imposed. 12. The above mandatory nature of the applicable Section 38(3) of the Act has been discussed by the Hon ble High Court Bombay its judgment dated 9-8-2010 as relied upon by the respondents herein in para 4 above. Hon ble High Court has held in para 4 that a delegated legislation will have to be read in the context of primary statute under which it is made and incase of conflict it is the primary legislation that will prevail. Further, the applicant has submitted that when penalty under Rule 11 of the Foreign Travel Tax has already been prescribed then neither there was requirement nor it was legally right to impose the impugned one-fifth penalty in this case. Here, Govt. is of the considered views that when such two separate provisions exists for taking due action in relation to committed breach of law then the separate sanctity of each of them is to be religiously maintainable independently and when a situation of such conflict arises the primary legislation will prevail. The observation s of Hon ble Supreme Court in case of ITW Singnode India Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrier or other person who fails to pay the Inland Air travel tax to the credit of the Central Government under sub-section (2) of section 42 shall, in addition to the payment of such tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government. These provisions for Inland Air Travel Tax and Foreign Travel Tax collection are similar. In the case matter under reference the Government here cites and discusses Hon ble High Court of Delhi judgment dated 12-8-2009 in W.P. No. 10835 of 2009 in the matter of IATT, of Jet Airways (I) Ltd. v. U.O.I. Others. In the said case, Government had passed Government of India Order No. 73/09 dated 12-5-2009 for similar contraventions in almost identical situation by Jet Airways (I) Ltd. wherein Government had upheld the order passed by Commissioner (Appeals) imposing penalty under Section 46(3) ibid, equal to one-fifth of amount of tax not so paid to the credit of Central Government. The said order was challenged by the party in Hon ble High Court of Delhi, who in its judgment dated 12-8-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 3269/04, 3918/05 and 02552/06 filed by various Airlines. In the said judgment Hon ble High Court while dismissing the Writ Petitions has observed on the issue as under :- Para 49 .. It is well settled principle of law that in case of a conflict between a substantive act and delegated legislation, the former shall prevail in as much as delegated legislation must be read in the context of the primary/legislative act and not the vice-versa. Para 52. The provision of Chapter-V of the Act in general and section 38(3) in particular provides that every carrier or other person, who fails to pay the FTT to the credit of the Central Government under sub-section (2) of the section 35, in addition to payment of such tax and the interest leviable thereon, is made liable to pay penalty. The said provision shows the mandatory nature of payment of liability. The use of the word shall in the statute, ordinarily speaking, means the statutory provision is mandatory Para 54 ..Therefore, there is no need to establish proof of criminal motive or any mens rea on the part of the defaulter. It is not an essential element for imposing penalty under the Act and rules frame ..... X X X X Extracts X X X X X X X X Extracts X X X X
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