Dahnay Logistics Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
Summary: The appeal was filed by Dahnay Logistics Pvt. Ltd. against Order-in-Original No.113395/2025 dated 29.05.2025, whereby the Adjudicating Authority permitted re-export of 104.416 MT of Mono Ammonium Phosphate, Technical Grade, valued at Rs.91,58,883/-, but imposed a penalty of Rs.4,00,000/- under Section 117 of the Customs Act, 1962.
The consignment had been shipped by M/s PGP International, Pte. Ltd., Singapore for M/s Greenstar Fertilizers Limited, Chennai. It was shipped from Port Klang, Malaysia, for discharge at Tuticorin, with Kattupalli Port intended as the transhipment port. As a coastal vessel was unavailable to transport the goods from Kattupalli to Tuticorin, and detention and demurrage charges were accumulating, the shipper decided to re-export the goods. Dahnay Logistics made representations dated 05.02.2025 and 07.04.2025 seeking permission for re-export.
The appellant contended that the penalty had been imposed without identifying any contravention of the Customs Act. It also submitted that the penalty was paid under protest to facilitate re-export, but the Let Export Order was issued only on 22.08.2025. The appellant relied upon various decisions concerning imposition of penalties and detention and demurrage waiver.
The Tribunal examined Section 117 of the Customs Act, which applies where a person contravenes a provision of the Act, abets such contravention, or fails to comply with a statutory requirement with which it was his duty to comply, where no express penalty is otherwise provided. The Tribunal held that penalty under Section 117 is not automatic and that the statutory conditions for its invocation must first be satisfied.
