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TMI Blog2002 (8) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... z., urea in bags weighing 14,784,250 Metric Tonnes. It was alleged that there was short landing of 109.750 Metric Tonnes. The consignees of the goods were Southern Petrochemical Industries Corporation Limited, Madras. Action was initiated against the petitioner as agents under Section 148 of the Customs Act. Proceedings were also initiated under Section 116 of the Customs Act for levy of penalty. Show cause notice was however, issued only in the year 1990 after a period of six years. The authorities without appreciating the proper scope and effect of Sections 116 and 148 of the Customs Act levied a huge penalty of Rs. 3,08,162/-. As against the said order, the petitioner filed an appeal to the fourth respondent and by order dated 23-9-1993, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an authorised agent for unloading the cargo at Pondicherry Port. The vessel has discharged a total quantity of urea of 14674.500 M.Ts. As per the landing certificate as against the manifested quantity of 14784.250 M.Ts. With the result, there was a short landing of 109.750 M.Ts. of urea. The import duty that would have been chargeable on the deficit goods but for the exemption was Rs. 3,08,162/-. Therefore, the petitioner was called upon to show why a penalty not exceeding twice the amount of import duty could not be imposed as against the petitioner. The revisional authority in their order, allowed short landing of 0.5 per cent of the manifested quantity to be condoned due to inevitable loss during the transit and handling operations and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner has raised the following points :- (i) Urea being an exempted commodity, no duty was leviable. Penalty was leviable only in respect of import of dutiable goods and therefore, urea not being dutiable, no penalty can be imposed. (ii) The import was completed on 20-7-1984 and the show cause notice has been issued only on 23-10-1990, with the result of a delay of more than six years. Even though Section 116 of the Act does not provide any minimum period of limitation, the Courts have repeatedly interpreted the provision to the effect that the levy should be made within a reasonable period and in accordance with the rulings, a maximum period could be only five years and not more. (iii) The order of the revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the respondents the objection regarding delay cannot result in setting aside the entire levy of penalty unless the petitioner has shown any prejudice as a result of the delay. 8.I have considered the submissions of both sides. 9.In the context of the levy of penalty in case of non-dutiable goods, a perusal of Section 116 of the Act shows that no distinction is made between dutiable goods and non-dutiable goods. Reference to the rate of duty is made only in the sub-sections (a) and (b) only for the limited purpose of assessment of penalty. Such a guideline for assessment of penalty cannot be construed as imposing a principal condition that penalty could be levied only over dutiable goods. A perusal of the various prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the delay beyond six years. 11.In this context, in Government of India v. Citedal Fine Pharmaceuticals [1989 (42) E.L.T. 515 (S.C.)], the Supreme Court held that in the absence of any period of limitation, it is settled that the authority has to exercise powers within a reasonable period and what would be the reasonable would depend upon the facts of each case and whenever question regarding the inordinate delay was in issue, it would be open to the assessee to contend that it was bad on the ground of delay. 12.In E.C. Bose and Company Pvt. Ltd. v. Union of India [1992 (58) E.L.T. 432 (Cal.)], the learned Judge of Calcutta High Court held that in the instant case, the demand having been raised with a delay of more than seven years, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the levy of penalty. I am also inclined to take note of the fact that the imported material is not a dutiable material, though not exempted from the levy of penalty. 15.Therefore, taking the over all circumstances into consideration, and the unexplained delay in making the demand, ends of justice would be met by reducing the penalty to Rs. 20,000/- (Rupees twenty thousand only). Penalty in this case does not relate to any loss of revenue to the State. It is intended only to be a punishment for violation of the provisions of the Customs Act. It is just and proper to impose a reasonable punishment and not a punishment disproportionate to the nature of the violation. 16.In the result, the writ petitions stand partly allowed modifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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