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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 ..... me in their own name after filing the Bills of Entry. (ii) During the period of 1.4.2002 to 31.3.2004 M/s. BPCL has been including HSSC at the rate of 1% of C & F charges, whereas factually they were paying 1.5% of C & F value as HSSC (High Sea Sales Commission) to the original importer viz., M/s. IOCL, who are the canalizing agency for the imports of the subject goods and who sells these goods on HSS (High Sea Sales) basis to the appellant M/s. BPCL. (iii) The department s case is that based on the intelligence that M/s. BPCL did not declare to the Customs Department regarding actual canalizing/HSSC commission paid by them to IOCL and also the actual demurrage charges paid by them to the transporters/charters, the Department s agency DRI started the investigation in the subject matter. (iv) There is condition in the contract/agreement between BPCL and the Foreign Supplier that the discharge of the LPG should be completed within a specified period of time, which is usually reckoned from the time the Captain of the tanker/vessel gives notice of readiness of unloading of the cargo upon arrival which is internationally known as Lay time . In certain rare cases when the appellant M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal with the prayer that the impugned order has not included the amount of interest part of the demand leading to imposition of less penalty of Rs. 46,84,824/- instead of Rs. 52,34,210/-; therefore, penalty of Rs. 52,34,210/- needs to be imposed. 3. Both sides have been heard. 4. The facts of the case and the submissions of both sides have been carefully considered. The main issues to be considered are: (i) Whether demurrage charges are to be included in the assessable value or not (ii) Whether the penalty on the appellant M/s. BPCL is imposable, and if so, how much it is to be (iii) Whether Redemption Fine is imposable 5. Issue No.1: Whether demurrage charges are to be included in the assessable value or not This issue of inclusion of demurrage charges in the assessable value has been decided by the Hon'ble Supreme Court in the case of CCE, Mangalore vs. M/s Mangalore Refinery Petrochemicals Ltd. (MRPL): 2015 (325) ELT 214 (SC) wherein it has been held that demurrage charges are incurred after the goods reach Indian Ports and hence, this is a post importation event, and cannot form part of transaction value. In the said decision, the Hon'ble Supreme Court has observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand has been levied under Section 18(3) of the Customs Act, 1962 and not under Section 28 and therefore, imposition of penalty is not sustainable. 6.1 Considering overall facts on record and the fact that goods were initially assessed provisionally and later assessed finally under Section 18 of the Customs Act, and the fact that when the mistake of non-declaration of payment of 1.5% HSSC to M/s. IOCL was noticed, the appellant, BPCL paid the differential duty along with interest on 6.9.2004, the penalty under Section 114A of the Customs Act, 1962 is not liable to be imposed. The Tribunal s decision in the case of IOCL vs. CC: 2004 (178) ELT 713 (Tri.-Bang.) supports our view of non-imposition of penalty for the present facts. The Hon'ble Supreme Court has also endorsed this decision of the Tribunal in Commissioner vs. IOCL: 2015 (321) ELT A50 (SC). 6.2 Further, the Tribunal in the case of Escorts Heart Institute & Research Centre vs. CC (Import & General), New Delhi: 2016 (336) ELT 185 (Tri.-Del.) has held that when demand has not been raised in terms of Section 28, penalty under Section 114A is not imposable. The Tribunal in the said case has observed as under: 8. It is evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), has rendered decision on identical issue. One of the substantial questions of law placed before the High Court by the department was whether redemption fine under Section 125 of the Customs Act could be imposed where the goods were neither available for confiscation nor cleared under bond/undertaking. The Hon'ble High Court followed the ratio of the Apex Courts judgment in Weston Components case and held that, as the goods in question had been allowed to be cleared without execution of any bond/undertaking by the importer, no redemption fine could be imposed under Section 125 of the Customs Act in lieu of confiscation. Reproduced below is the relevant part of the High Courts judgment. 12. It may also be noticed here that in the case of M/s. Weston Components Ltd. v. Commissioner of Customs, New Delhi (supra), the goods were released to the assessee on an application made by it an on the execution of a bond by the assessee and in those circumstances, the Hon'ble Apex Court held that the mere fact that the goods were released on the bond being executed would not take away the power of custom authority to levy redemption fine. A reading of the judgment/order of the Hon'ble A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l with consequential relief as per law. (emphasis supplied). Dismissing the department s Civil Appeal filed against the above order of the Tribunal, the Apex Court ordered vide 2005 (184) E.L.T. A36 (S.C.) as under: We see no reason to interfere with the impugned order. The appeal is dismissed. (emphasis supplied) In the result, the view taken by the Tribunal in Chinku Exports case stands affirmed by the Apex Court and consequently the similar view taken by the P & H High Court in Raja Impex case is a binding precedent while the contra decision of the Madras High Court in Venus Enterprises case ceases to be good law on the point. It may be noted contextually that the dismissal, by the apex Court, of the SLP filed by M/s. Venus Enterprises did not have the effect of enhancing the precedent value of the High Courts decision in that case. The Hon'ble Bombay High Court has upheld the Larger Bench decision of the Tribunal in the case of Commissioner vs. Shiv Kripa Ispat Pvt. Ltd.: 2015 (318) ELT A259 (Bom.) and inter alia held that no redemption fine can be imposed when the goods are not physically available for confiscation. Consequently, the impugned order imposing redemption fine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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