In a recent ruling, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that inability to produce the manufacturer’s invoice due to the supplier’s unwillingness to share will not attract a penalty under section 117 of the Customs Act, 1962.
RidavaPetrochemicals Pvt Ltd,the appellant had imported one consignment of 1900 MT of de-natured ethyl for re-exports and filed warehouse bill of entry No. 9846933 dated 07.12.2020. The Bill of Entry was assessed and goods were permitted to be deposited in a bonded warehouse.
Denatured Ethyl Alcohol (Ethanol) is classifiable under the Chapter Heading 22072000 of the Customs Tariff and attracts duties leviable to that tariff heading for Ethyl Alcohol and other spirits, denatured, of any strength. As per revenue, import, as well as re-export of the goods in para 2.46 of a Foreign Trade Policy, 2015-2020 read with Notification No. 6/2015-2020 dated 24.05.2019 and Trade Notice No. 27/2019-20 dated 29.07.2019,are restricted for import and export.
The Adjudicating Authority reject the CTH 22072000 declared in the Bill of Entry and Shipping Bill and ordered to re-classify the same under CTH 22071000 and dropped the proposal to confiscate the goods under Section 111(d) of the Customs Act and imposed penalty under Section 112, 114AA, 117 of the Customs Act, 1962.
The CESTAT observed that since goods are not meant for any use in India, they same are not required to be allowed clearances in India, the charges of misdeclaration of goods against the appellant by citing the non-compliance with IS 4117-1973 (2008) cannot be sustained.
Further viewed that there is no restriction imposed under the FTP on the import and export of subject goods. Further, confiscation under Section of the Act is permissible only when the goods have been imported contrary to the prohibition under the Act or any other law for the time being in force which is not the case in the case of present import by the appellant.
It was evident that after arrival in India, the Chemical Examiner of the Custom House laboratory at Kandla certified that goods have been denatured with Bitrex/Denatonium Benzoate.
A Coram comprised of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) held that only for inability to produce the manufacturer’s invoice that too due to the supplier’s unwillingness to share the same, by itself does not construe any offence that may attract penalty under Section 117 of the Customs Act, 1962.
Further viewed that if the supplier is not willing to share the manufacturer‟s invoice, it is beyond the control of the appellant for which no penalty under Section 117 can be imposed.The Tribunal set aside the confiscation and redemption fine and the penalties imposed on appellants.
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