The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the penalty imposed on the importer of ship breaking vessels for sale of Gas Cylinder along with vessels without scrapping as mandated under the law.
The appellant, G N Ship Breakers is an importer of ship breaking vessels. The department held that the appellant is liable for penalty under section 112 (a) of the Customs Act, 1962 for sale of Gas Cylinder along with vessels for ship breaking without being scrapped.
Shri J.A Patel, appeared for the department defended the order for penalty and contended that as per the statement of appellant’s partner it is admitted fact that the appellant after import of ship breaking vessels sold the gas cylinder as such without scrapping the same. Therefore, they have violated provisions of Gas Cylinder Rules, 2004 and GMB Notification No. GMB/Sosiya/73/110/2003/09 dated 26.07.2003.
Mr. Ramesh Nair (Judicial Member) found that there is no dispute and the same was admitted by the appellant’s partner that they had indeed imported the vessels which contained the Gas Cylinder and they have sold 290 cylinder to Minaz Gulamabbas Firsta.
“It is their submission that they had given to Minaz Gulamabbas Firsta for scrapping however, since Minaz Gulamabbas Firsta has sold it as such.The submission of the appellant that it was given for processing or scrapping has no basis. Moreover, Minaz Gulamabbas Firsta has admitted that he has purchased the Gas Cylinder from the appellant. In this undisputed fact it is clear that the appellant have sold /disposed of the cylinder without scrapping it which is mandatory as per the Gas Cylinder Rules, 2004. For contravention of the provisions, the appellant was rightly imposed penalty under section 112(a) of the Customs Act, 1962. I find that the value of the cylinder sold by the appellant is Rs 8,70,000. Accordingly, the penalty of Rs. 1,00,000 is excessive and same deserves to be reduced. I therefore reduce the penalty from Rs 1,00,000 to Rs, 50,000/-,” the Tribunal said.
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