K. Anpazhakan, Member (T)
1. The Appellant, M/s. Patnaik Steels & Alloys Limited imported coal through Dharma Port in Odisha. The said imported goods were assessed
provisionally under section 18 of the Customs Act, 1962 read with Customs (Provisional Duty Assessment) Regulations 2011 (hereinafter referred as
Regulations 2011), pending submission of some of the documents by the Appellant. As per Regulation 3 of the above said Regulations, the appellant
has to submit all documents necessary for finalization within one month from the date of provisional assessment.
2. The Appellant submitted that they have imported coal vide 8 (eight) Bills of Entry, out of which documents in respect of 7(seven) Bills of Entry
have been submitted and the assessment were finalized. In respect of the remaining 1(one) Bill of Entry, they could not submit the documents within
the stipulated time period of 30(thirty) days. Accordingly, the department initiated proceedings for imposition of penalty as per Regulation 5 of the
above said Regulations 2011. The Notice was adjudicated by the Assistant Commissioner wherein he has imposed a penalty of Rs.5,000/-(Rupees
Five Thousand only) in respect of 1(one) Bill of Entry. Aggrieved against the lesser penalty imposed, the department filed appeal before the
Commissioner (Appeals). The Ld.Commissioner (Appeals) enhanced the penalty of Rs.50,000/-(Rupees Fifty Thousand only) for the said 1(one) Bill
of Entry, vide the impugned order dated 30/10/2018. Aggrieved against the impugned order passed by the Ld.Commissioner(Appeals), the appellant
has filed this appeal.
3. In their submissions, the Ld.Counsel for the appellant submits that they have submitted all the documents while submitting their reply to the show
cause notice. As per Regulation 5, the penalty of Rs.50,000/-(Rupees Fifty Thousand only) has been prescribed as a maximum penalty. It is not
mandatory to impose the maximum penalty in all cases. Reduced penalty can be imposed as non-submission of documents within the stipulated time
period is only a procedural lapse and they have submitted all the documents along with the reply to the Notice. He has cited the following decisions in
support of his contentions that the maximum penalty need not be imposed for non-submission of documents in time.:-
1. Jai Balaji Industries Ltd. Vs. CC (Preventive), Bhubaneswar [2021 (376) ELT 730 (Tri.-Kolkata)]
2. MSP Steel & Power Ltd. Vs. CC (Preventive), Bhubaneswar [Customs Appeal No.75465 of 2019
4. In view of the decisions cited above, he prayed for setting aside the enhanced penalty imposed in the impugned order.
5. The Ld. Authorized Representative appearing for the Revenue submits that submission of documents within the stipulated time period is necessary
for timely finalization of the provisional assessments. Delay in submission of documents have delayed the finalization of the provisional assessment and
consequently realization of duty liability, if any, from the appellant. Accordingly, he justified the enhancement of the penalty by the
Ld.Commissioner(Appeals) in the impugned order.
6. Heard both sides and perused the appeal documents.
7. I find that the issue involved in the present appeal is imposition of penalty for non-submission of the documents as per Regulation 5 of the Customs
(Provisional Duty Assessment) Regulation, 2011.
8. From the records it is seen that the appellant has imported coal through 8 (eight) Bills of Entry and the same were provisionally assessed for want
of documents. The appellant has already submitted documents in respect of 7 (seven) Bills of Entry and the corresponding Bills of Entry were finally
assessed. In respect of the remaining 1(one) Bill of Entry, there was a delay in submission of documents. Accordingly, the department has initiated
proceedings for imposition of penalty under Regulation 5 of the above said Regulations 2011.
9. I find that the adjudicating authority has imposed a penalty of Rs.5,000/- (Rupees Five Thousand only) as the appellant has already submitted the
documents while submitting the reply to the show cause notice. The Appellant cited various decisions in support of their contention that reduced
penalty can be imposed for such procedural violations. I have perused the decisions cited by the appellant in support of their contentions that the
enhance penalty is not sustainable in this case. In the case of Jai Balaji Industries Ltd. (supra), this Tribunal has held as under:-
“9. I find that this is a case of delay in furnishing of certain documents. There is no revenue implication. The department has not been able to
establish any deliberate delay or any mala fide intention on the part of the appellant. As and when the appellant could gather the requisite documents
they were presented before the assessing officers for finalising the provisional assessments. In fact, out of the 35 Bills of Entry involved, 27 could be
finalised even before passing of the adjudication order. Keeping all this in view, the adjudicating authority took a fair decision and imposed a nominal
penalty of Rs. 20,000/-which comes to Rs. 2,500/- for each of the remaining 8 Bills of Entry yet to be finalised for want of all the documents. This
amount has already been paid by the appellant. The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to
the maximum of Rs. 50,000/- per Bill of Entry yet to be finalised.
10. In the case of Essar Oil Ltd. v. Commissioner of Customs (Prev.), Jamnagar [2015 (329) E.L.T. 401 (Tri. - Ahd.)], it was held by the Tribunal
that when there is some delay in furnishing the documents and there is no revenue implication, penalty is not called for.
11. I, therefore, allow this appeal by setting aside the Order-in-Appeal dated 29-3-2019 of the Commissioner (Appeals) and restoring the Order dated
1-11-2017 of the Original Authority.â€
10. I find that the present case at hand is squarely covered by the decisions cited above. The appellant has already submitted the documents
necessary for finalization of the provisional assessment while submitting their reply to the show cause notice. Thus, I find that the penalty of Rs.5,000/-
(Rupees Five Thousand only) imposed by the Assistant Commissioner would be sufficient to meet the ends of justice. I also find that the
Commissioner(Appeals) has not given adequate reason for enhancing the penalty from Rs.5,000/- (Rupees Five Thousand only) to Rs.50,000/-
(Rupees Fifty Thousand only). In view of discussions and the decisions cited above, I hold that the enhanced penalty is not warranted in this case.
Accordingly, the same is set aside.
11. In view of the above discussions, I set aside the enhanced penalty and allow the appeal filed by the appellant.
