Anshu Sahay Vs Commissioner of Customs (CESTAT Mumbai)
No penalties u/s 114A and section 114AA on failure to file transshipment bill as it did not invalidate the clearance provided by Customs
Conclusion: Failure to file a transshipment bill was deemed a technical lapse and it did not invalidate the clearance granted by customs. . Tribunal held that imposing duty demands and penalties in this matter lacked merit and legal basis.
Held: Assessee acted as an agent for salvaging operations of MSC Chitra, a vessel involved in an oil spill near Mumbai in 2010. Assessee facilitated the import and transfer of salvage equipment for use in the operation, which was claimed to qualify as “stores” for a foreign-going vessel under the Customs Act, 1962. The equipment was cleared under customs authorization but without filing a bill of transshipment. Later, Customs authorities had issued show-cause notices stating that the goods were neither exempt from duty nor exported and demanded duties along with penalties citing alleged violations under Sections 111 and 114 of the Customs Act. Assessee appealed before the CESTAT arguing that the goods were transshipped under proper customs permissions and used exclusively for salvaging MSC Chitra and further, failure to file a transshipment bill was a mere procedural oversight without revenue implications. Assessee submitted evidence including certifications from the Salvage Master to establish the deployment of the goods in the salvage operation. Revenue argued that the goods did not meet the definition of “stores” under the Customs Act and that MSC Chitra, being a wreck, could not be considered a foreign-going vessel. It claimed that the procedural lapse in filing the transshipment bill was sufficient grounds for duty liability and penalties. It was held that the movement and usage of goods were properly authorized by customs authorities and that no evidence suggested domestic use of the goods. Tribunal clarified that transshipment was a procedural matter and a failure to file the bill did not invalidate the clearance granted by customs. Tribunal further observed that the goods were used for salvaging a vessel in distress, and their classification as “stores” was consistent with the legislative intent of the Customs Act. Tribunal held that imposing duty demands and penalties in this matter lacked merit and legal basis, therefore, it set aside the orders imposing duties and penalties under section 114A and section 114AA of Customs Act, 1962 .
