Unauthorised Modification in Shipping Bill: CESTAT upholds Penalty [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), New Delhi Bench upheld penalty on the ground of unauthorised modification in shipping bill.

The appellant, M/s Euro Internationalis in appeal against confirmation of penalty under Section 114(3) and 114AA of the Customs Tariff Act, though Commissioner (Appeals) was pleased to reduce the quantum. A Show cause notice was issued proposing to confiscate the goods exported vide twenty shipping bills as per Annexure-A to the show cause notice having FOB value Rs.9 crores under Section 113(d), (g) and (i) of the Act.

Further, proposed to demand the ineligible amount of Focus Market licenses obtained, totalling Rupees twenty-two lakhsalongwith interest. Further, proposed to demand the amount of drawback under Section 75A of the Act read with Rule 16 of the Drawback Rules.

Further, penalty was proposed under Section 114 and 114AA of the Act. The Proprietor of freight forwarder, Imran Mirza was also made co-noticee for imposition of penalty under Section 114 and 114AA of the Act.

The appellant contested the show cause notice stating that the country of destination and port of despatch also changed as per the buyer’s request. However, admitting the error on their part, they have deposited the amount of scrip, which was availed and utilised alongwith interest and 25% penalty before issuance of show cause notice. It was further urged that the proposed confiscation of the goods is bad in law as penalty has already been paid on the value of scrips availed irregularly, no further penalty is eligible.

A Division Bench comprising observed that “I find that the appellant has resorted to unauthorised modification in the shipping bill after the same was passed by the proper officer of the Customs, which amounts violation of provisions of Section 114AA. However, in view of the facts and circumstances, upholding the penalty under this Section I reduce the penalty to Rupees two lakhs.”

“I further find that in the facts and circumstances of the case, the order of confiscation being set aside, the penalty under Section 114(iii) is also set aside, as this penalty is not imposable in absence of confiscation” the Tribunal noted.

To Read the full text of the Order CLICK HERE

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