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TMI Blog2008 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs duty by claiming the benefit of exemption under Customs Notification No. 262/58, dated 11-10-1958. This Notification was superseded by Customs Notification No. 133/87, dated 19-3-1987 which also granted exemption for such vessels. One condition under these Notifications was that the exemption would not be available to such vessels as were imported for the purpose of breaking up. An allied condition was that, if subsequently the vessel was to be broken, duty should be paid thereon as if it was imported for the purpose of breaking. Matsyafed alienated the vessels through tender/auction proceedings and the appellant purchased the same on payment of an amount of Rs. 20.00 lakhs, which amount was said to be inclusive of all taxes, duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer] from penal liability. The present appeal is directed against the Commissioner's decision. 2. It also needs mention that, after the first order of adjudication was passed, the party had made payment of Ks. 10,000/- towards fine, Rs. 1,00,000/- towards penalty and Rs. 4,87,600/- towards duty totalling to Rs. 5,97,600/-. 3. Today, learned Counsel for the appellant has challenged the Commissioner's second order on numerous grounds. It is submitted that Customs Notification No. 262/58 (as amended) was superseded by Customs Notification No. 133/87, dated 19-3-1987 and that this Notification was rescinded on 23-7-1996 by Notification No. 47/96-Cus. It is submitted that, since 23-7-1996, the condition attached to the exemption Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998 addressed to the Commissioner of Customs, Cochin, wherein the appellant had requested the Commissioner to allow him to redeem the vessels on payment of a fine of Rs. 1.00 lakh and also a penalty. In that letter, the appellant requested the Commissioner for release of the vessels for scrapping. Further, the appellant promised to pay duty on the goods out of sale proceeds of the scrap. In that letter, the appellant also offered to furnish bond or bank guarantee to ensure payment of duty. The offer made by the appellant in the above letter was repeated in subsequent letters dated 13-1-1999 and 29--1999, and the payments mentioned in para (2) of this order were made thereafter. 5. We have heard learned JDR, who has argued, with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such fresh Bill of Entry to the Collector of Customs for the purpose of break-up of such goods". (emphasis added) We note that the descriptive text of the condition given in Notification No. 133/87-Cus. is an amplified version of the condition stated in the predecessor-Notification. Going by the above condition read with the definition of "importer" given in the Customs Act, we hold the view that the appellant, who was the owner of the vessels on the date on which the vessels were seized by the department, was liable to step into the shoes of the importer for filing a fresh Bill of Entry with the Commissioner of Customs for the purpose of clearing the goods on payment of duty for the further purpose of breaking the vessels. The definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he vessels from Matsyafed came to be burdened with the liability to file fresh Bill of Entry to the Commissioner of Customs and to observe all the attendant formalities under the Customs Act. Therefore, in our considered view, the appellant cannot resist being burdened with the liability to pay duty of Customs on the vessels. Non-discharge of such liability amounted to breach of the condition attached to the Notification, attracting the provisions of Section 111(o) of the Customs Act also. In this context, we must also add that we have rejected the plea that the said condition ceased to be operative on the date of rescission of the Notification (23-7-1996) and hence did not affect the appellant. The liability to file fresh Bill of Entry in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Notification, the appellant rendered the goods liable to confiscation, thereby attracting penal liability under Section 112 of the Act. However, the quanta of fine and penalty imposed by the Commissioner are not reasonable in the facts and circumstances of this case. Learned Commissioner imposed a fine of Rs. 1.00 lakh in lieu of confiscation of the goods valued at Rs. 20.00 laths. His order does not disclose reasons for fixing this amount. The quantum of penalty is worse inasmuch as the learned Commissioner, who had imposed a penalty of only Rs. 10,000/- in the earlier round of litigation, chose to impose Rs. 20,000/- as penalty on the party in the second round, and that too without stating valid reasons. In our considered view, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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