Case Law Details
Hyundai Merchant Marine India Pvt. Ltd. Vs Commissioner Of Customs-EGM CELL (CESTAT Chennai)
Conclusion: CESTAT had deleted the penalty imposed by the Customs Department and held that no penalty could be levied under section 117 if there was no willful intention / wrongful mind for violating the law and such violation occurred was only due to inadvertent omission / system error.
Held: The issue arose for consideration was violation of Section 41 of the Customs Act, 1962 as penalty was imposed under Section 117 and it was the responsibility of assessee to file the EGM to the proper officer before departure of the conveyance from the Customs station and therefore, the penalty should be sustained. It was held that on receiving the notice from the department, assessee-company had immediately rectified the defect. There was no allegation of continued non-compliance. The facts brought to light established that the error was only due to inadvertent omission / system error etc. Penalty was a form of punishment by recovery of an amount from the offender. It was a form of pecuniary punishment inflicted by law for its violation. If there was no willful intention / wrongful mind for violating the law and such violation occurred was only due to inadvertent omission / system error, imposition of penalty was unwarranted. If there was continued non-compliance even after the errors being pointed out by the department, the circumstances would have been different and penalty might be imposable. After the amendment to Section 41, the section itself provides for penalty not exceeding Rs.50,000/-. That too only if proper officer was satisfied that there was no sufficient cause for delay in filing EGM. This being so, the invocation of Section 117 was not legal or proper. Thus, the penalties imposed under Section 117 of Customs Act were unwarranted and could not be sustained.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The facts are that in respect of 7 Shipping Bills as referred in the table below the appellants failed to file Export General Manifest (EGM). Show cause notices were issued alleging violation of Section 41 of Customs Act, 1962 and proposing to impose penalty under Section 117 of the Act ibid. After due process of law, the original authority imposed penalty of Rs.1 lakh against each shipping bill. Aggrieved by such order, the appellants preferred appeals before the Commissioner (Appeals) who reduced the penalty to Rs.30,000/- against each shipping bills :
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