Case Law Details
P. J. Johnson & Sons Ship Chandlers & Engineers Vs Commissioner of Customs (CESTAT Bangalore)
Introduction: In a landmark decision, the Customs, Excise, Service Tax Appellate Tribunal (CESTAT) in Bangalore quashed a penalty levied against P. J. Johnson & Sons Ship Chandlers & Engineers. The Tribunal maintained there was no violation of Section 89 of the Customs Act, upending the original verdict to revoke their permission to operate as ship chandlers.
Analysis: The penalty was imposed following an incident involving the export of 2,00,000 3-ply non-woven masks to the Philippines Navy vessel BRP Davao Delsur, deemed as a violation of the Customs Act. However, the Tribunal argued that the appellant had adhered to the Customs Act, demonstrating compliance by filing a Manual Shipping Bill, obtaining permission from the jurisdictional officers, and evidencing the masks’ use for the Philippines Government’s COVID-19 mitigation efforts. The counsel also argued that as ‘Ship Stores,’ the applicability of the DGFT Notification is irrelevant. Thus, the imposed penalty and revocation of permission to operate as ship chandlers were deemed unwarranted.
Conclusion: The CESTAT ruling exemplifies the complex interplay between export rules and the Customs Act. This verdict clarifies that the operation as a ship chandler, when executed within the guidelines of the Customs Act, can withstand the scrutiny of a penal imposition. It highlights the importance of due diligence and documentation in navigating the legal seas of custom duties and international shipping, thus serving as a precedent for similar cases in the future.
FULL TEXT OF THE CESTAT BANGALORE ORDER
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