CESTAT Sets Aside Enhanced Penalty on Visa Steel Ltd., Restores Original ₹20k Fine as Delay Not Attributable to Importer [Read Order]

The appellant Visa Resources India Ltd had imported 16 consignments under various Bills of Entry during the period 2011-2012 to 2014-2015. Later, customs authorities issued a Show Cause Notice to the company inquiring about the non-finalization of some provisionally assessed Bills of Entry as required under the Customs (Provisional Duty Assessment) Regulations, 2011.

Tax Planning For NRIs - CLICK HERE

The appellant submitted that they had filed all the necessary documents in respect of 33 Bills of Entry, out of which 25 had been finalized and 8 were yet to be finalized by the Department. The adjudicating authority after going through the facts of the case imposed a penalty of ₹20,000 under Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011.

The Revenue filed an appeal before the Commissioner (Appeals) seeking to enhance the penalty to ₹4,00,000 arguing that in respect to the 8 Bills of Entry yet to be assessed by the adjudicating authority, a penalty of ₹50,000 should have been imposed for each Bill of Entry.

The Commissioner (Appeals) allowed the appeal of the Revenue.

The appellant submitted that all necessary documents were provided for 33 Bills of Entry. Out of these 25 were finalized by the Department, while the remaining 8 were not finalized there were no deficiencies pointed out by the Department for the documents submitted by them.

Thereby, the appellant contended that the adjudicating authority had correctly taken a lenient view and imposed a penalty of ₹20,000 . Further reliance was placed on the case of Jai BalajiIndustries Ltd. Vs. Commissioner ofCustoms (2023 TAXSCAN (CESTAT) 665) wherein, this tribunal had observed the lenient view taken by the adjudicating authority as proper on a similar issue.

The department reiterated the findings of the Commissioner (Appeals) and submitted that Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 provides for a penalty of ₹50,000 in case of each of the non-assessment of Bill of Entry. Thereby justifying the enhanced penalty of ₹4,00,000.

 Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc... Click Here

The Bench comprising R. Muralidhar (Member Judicial) and Rajeev Tandon (Member Technical) set aside the enhanced penalty holding that on the factual matrix with respect to the 8 Bills of Entry, the assessment was finalized without any fault on the part of the appellant.

The tribunal further relied on the coordinated bench decision in Jai Balaji (supra) where it was held that in cases of delay in furnishing certain documents, if there is no revenue implication and no deliberate delay or mala fide intention is established on the part of the appellant then the adjudicating authority had rightly imposed penalty and there was no ground for enhancing it to the maximum prescribed under the regulations.

Accordingly, the appeal was disposed of.

The appellant was represented by Pritha Sarkar, while the Department was represented by T. Suleman.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates