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TMI Blog2017 (10) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be imposed - penalty set aside. Whether Redemption Fine is imposable? - Held that: - the matter of imposition of redemption fine has been discussed by the Larger Bench of the Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. CCE [2009 (1) TMI 124 - CESTAT MUMBAI], wherein it has been held that where the goods had been cleared without execution of any bond /undertaking, no redemption fine could be imposed under Section 125 in lieu of confiscation - the impugned order imposing redemption fine of ₹ 5,00,000/- is hereby set aside. Appeal allowed - decided in favor of appellant. - C/261/2008 & C/321/2008-DB - Final Order No. 21814 - 21815 / 2017 - Dated:- 30-8-2017 - Shri S. S. Garg, Judicial Member And Shri Ashok K. Arya, Technical Member Mr. G. Shviadass, Advocate For the Appellant Mr. Naveen Kushalappa, AR For the Respondent ORDER Per : Ashok K. Arya These two appeals are against the common Order-in-Original No.7/2007 dated 30.11.2007. One appeal is filed by M/s. Bharat Petroleum Corporation Ltd. (BPCL) contesting the demands of duty on account of demurrage charges and on account of High Sea Sales Commission (HSSC), and also against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect period 1.4.2002 to 31.3.2004 imported LPG under 134 Bills of Entry. When DRI initiated investigation into the HSSC charges paid by M/s. BPCL to IOCL, they remitted the differential duty on 6.9.2004. M/s. BPCL in the case of subject imports made during the period 1.4.2002 to 31.3.2004, assessments were made provisional by the Customs Authorities, for the reason that the originals of the invoice, bills of lading, certificate of origin and purchase contract were not available at the time of filing of Bills of Entry and only photocopies of the same could be filed at the time of imports. M/s. BPCL claims that on receipt of the original documents, they submitted the same to Customs with a request for finalization of their assessments. (vii) Based on above facts, BPCL was issued show-cause notice (SCN) dated 13.3.2007 proposing to include the demurrage charges of ₹ 22,31,781/- paid to the supplier, on account of detention of the vessel beyond the lay time, into the assessable value of the imported LPG, and HSSC of ₹ 1,01,39,559/- into the assessable value by invoking the provisions of Section 14 of Customs Act, 1962 read with Rules 4 and 9 of the Customs Valuation Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty demand on demurrage charges is not sustainable and the same is hereby set aside. 6. Issue 2: Whether the penalty on the appellant M/s. BPCL is imposable and if so, how much it is to be The main plea of the appellant is that there are divergent practices which were followed in different ports on the issue of inclusion of HSSC. M/s. BPCL, the appellant states that there was practice of inclusion of 1% of C F value of the goods as HSSC at Mangalore Port; whereas in Mumbai Port, there was practice of addition of HSSC of 2% of C F value of the imported goods. The Appellant further states that it was only in the year 2004 that CBEC issued the circular dated 11.5.2004 clarifying that the HSSC charges are to be taken as 2% which was the general practice and in case it is more, then actual contract price paid by the last buyer is to be taken as the value for the price of assessment. M/s. BPCL further argues that there were divergent practices and lack of clarity on the issue, hence they followed the practice of addition of 1% of C F value as HSSC bona fidely. It has also been argued by the learned Advocate for the BPCL that as soon as they came to know about the investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the penalty under Section 114A was not sustainable. The further reasoning that there could have been penalty under Section 112 but since that provision was not invoked, the direction to pay penalty at ₹ 2.34 crores was not warranted in the circumstances, does not appear to be in error of law. For these reasons the Court is of the opinion that the question of law framed has to be answered against the revenue and in favour of the assessee. Thus in the facts and circumstances of the present case, penalty under the Section 114A ibid is simply not attracted. The above quoted para of the Delhi High Court judgment also deals with Revenue s contention regarding penalty under Section 112 ibid which we (have to) respectfully follow. The Hon ble Supreme Court has also endorsed this view of the Tribunal in the case of Commissioner vs. Escorts Heart Institute Research Centre: 2017 (348) E.L.T. A131 (SC) and has held that penalty under Section 114A of the Customs Act, 1962 was not imposable for mis-declaration of imported goods if duty demand not raised in terms of Section 28 of the show-cause notice. 7. Issue 3: Whether Redemption Fine is imposable This matter of imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be imposed. We are, therefore, not inclined to accept the contention raised by the appellant on this issue and set aside the redemption fine. 13 The reliance of learned counsel for the revenue upon the provisions of Section 125 of the Act is also misconceived. Section 125 of the Act is applicable only in those cases which have been cleared by the concerned authorities subject to furnishing undertaking/bond etc. However, in the present case, admittedly, the goods were cleared by the respondent-authorities without execution of any bond/undertaking by the assessee. Thus, in view of the fact and circumstances of the case, we find no error in the impugned orders. No substantial question of law arises for our determination in the present appeal and the same is hereby dismissed. (emphasis supplied.) 10. We have also particularly noted a decision of the Tribunal (cited by the learned advocate) which stands upheld by the Supreme Court. In Chinku Exports case, the Tribunal had held the redemption-fine-related issue against the Revenue in para (10) of its order, reproduced below : 10. In view of the aforesaid findings and analysis, we are of the considered opinion that n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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