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IN THE HIGH COURT OF BOMBAY
ABHAY AHUJA, DHIRAJ SINGH THAKUR, JJ.
The Principal Commissioner of Customs Pune Commissionerate – Appellant
Versus
JSW Steel Ltd. – Respondent
Custom Appeal No. 4 of 2021
Decided on : 26-07-2022
Customs Act - Late Fees - Section 46(3)
Fact of the Case:
The case involved the late filing of a Bill of Entry for the clearance of imported goods, leading to a dispute over the imposition of late fees. The Respondent-Company had filed the Bill of Entry for the entire quantity within the prescribed time limit, but a portion of the goods was found short-landed at a different port. After necessary amendments to the Import General Manifest, the Respondent-Company filed the Bill of Entry for the short-landed goods on the same day the amendments were approved.
Finding of the Court:
The court found that the Respondent-Company had acted bona fide and had demonstrated its eagerness to comply with the law. The Assessing Officer's imposition of late payment charges was based on technicalities and lacked judicious application of mind. The Appellate Authority and the Tribunal rightly set aside the late payment charges, and the court dismissed the Appeal, finding no substantial question of law.
Issues: The main issue was the imposition of late fees for the late filing of the Bill of Entry, with the Appellant arguing that the delay constituted a breach of Section 46(3) of the Customs Act, 1962.
Ratio Decidendi: The court held that the satisfaction for sufficiency of cause for late filing charges is a subjective discretion to be exercised judiciously. It found that the Respondent-Company had acted bona fide and had made efforts to comply with the law, leading to the dismissal of the Appeal.
Final Decision: The court dismissed the Appeal, upholding the decision of the Appellate Authority and the Tribunal to set aside the late payment charges imposed on the Respondent-Company.
JUDGMENT :
ABHAY AHUJA, J.
1. This is an Appeal by the Principal Commissioner of Customs, Pune, impugning the final order No.A/86867/2019 dated 17th September, 2019 passed by the Customs, Excise & Service Tax Appellate Tribunal, Mumbai (“CESTAT”) holding that the late fees charged in the adjudication order is unwarranted.
2. Brief facts are that the Respondent-Company JSW Steel Ltd., and its subsidiary M/s.Amba River Coke Ltd. (“ARCL”) both imported a total 1,10,000 metric tons Coking Coal from M/s. JSW International Pty Ltd., Singapore by the same vessel MV CAPE IOANNA. An Import General Manifest (IGM No.2161880) was filed on 6th April, 2017. ARCL imported 11,550 metric tons of Peak Down North Coking Coal under Bill of Entry No.9214268 dated 7th April, 2017 filed at Jaigad Port and was assessed provisionally. The Respondent – M/s. JSW Steel Ltd., imported 98,450 metric tons of Goonyella C Coking Coal for discharge at Marmagao Port which arrived on 14th April, 2017 and Bill of Entry No. 9375854 dated 20th April, 2017 was filed at Marmagao Port for clearance which was provisionally assessed and allowed clearance on payment of duty of Rs.9,32,79,393/-.
3. At the time of clearance of import, goods of a quantity of 1,341 metric tons was found short at Marmagao Port as the same was landed at Jaigad Port. This quantity was not assessed at Marmagao Port and left uncleared at Jaigad Port. The Respondent-Company came to know of this fact from ARCL. After detailed scrutiny, the Respondent-Company ascertained that the excess cargo that was unloaded at Jaigad Port was in fact Goonyella C Coking Coal and not Peak Down North Coking Coal. The Respondent-Company, therefore, vide its letter dated 5th December, 2017, informed the Customs Authorities of the same and that the said 1,341 metric tons of Goonyella C Coking Coal which was to be discharged at Marmagao Port, Goa had been wrongly discharged at Jaigad Port for which the Respondent-Company had paid duty at Marmagao Customs, presuming that full quantity of import would be cleared at Marmagao Port. The Company also requested that they may be allowed to file a Bill of Entry for a differential quantity and that the said cargo may be allowed clearance. The Customs House Agent (“CHA”) and Shipping Agent were instructed for processing of filing of Bill of Entry after necessary re-amendment to the IGM. The Customs Authority after considering the request made by the Shipping Agent changed the IGM from Peak Down North Coking Coal to Goonyella C Coking Coal, but the same was kept in the name of ARCL. Therefore, a request was made vide letter dated 15th February, 2018 by the Shipping Agent for the necessary amendments in the IGM. However, despite the amendment in the IGM, the Bill of Entry could not be filed by the CHA through “ICEGATE System” as there was an error shown. Finally, the amendments to the IGM were approved by the Customs Authorities on 14th March, 2018 and on the same day, the Respondent-Company filed the Bill of Entry to clear the goods.
4. The Electronic Data Interchange (“EDI System”) of filing the Bill of Entry calculated the total amount payable as Rs.50,46,182/- which included Customs duty as well as the charges for late filing of Bill of Entry amounting to Rs.33,45,000/-. The Respondent-Company thereafter, made a request in March-2018 to waive off this fine/late fee charge calculated by the EDI stating that the delay in filing the Bill of Entry to clear the differential quantity at Jaigad was not on account of their fault. The Customs Authorities vide communication dated 5th April, 2018 rejected the request of the Respondent-Company. Paragraph 5 of the said communication is pertinent and is quoted as under:
The court emphasized the importance of demonstrating bona fides and eagerness to comply with the law in cases involving late filing of import documents, and held that the satisfaction for sufficiency....
The court affirmed that demand notices for IGST short payment are valid under the Customs Act, despite claimed bona fide mis-declaration, as there were no supporting documents for amending the bill o....
The time of presenting the bill of entry is an essential criteria for determination of rate of duty, and charging enhanced rate of duty based on a notification with retrospective effect is deemed arb....
Penalties under the Customs Act cannot be imposed without clear evidence of intent to defraud or wrongdoing.
Penalties under the Customs Act cannot be imposed without clear evidential support for wrongdoing, emphasizing procedural correctness and natural justice.
The limitation period for issuing show cause notices under Section 28(9)(a) of the Customs Act, 1962 is mandatory, and failure to conduct pre-notice consultation renders the proceedings void.
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