Tribunal waives penalty for late appeal filing in basmati rice export case

The Appellate Tribunal CESTAT, New Delhi allowed the condonation of a 7-day delay in filing the appeal by M/s Kunal Travels (Cargo). The Tribunal waived the penalty of Rs. 75,000 imposed under Section 114AA of the Customs Act, 1962, on the applicants involved in the export of basmati rice. Despite Revenue's arguments, the Tribunal found no evidence of mala fide intent by the applicants and granted relief by waiving the penalty and staying the recovery pending appeal disposal.

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Issues: Delay in filing appeal, Penalty under Section 114AA of the Customs Act, 1962

In the judgment delivered by the Appellate Tribunal CESTAT, New Delhi, the applicants filed an application for condonation of a 7-day delay in filing the appeal, which was allowed after considering the reasons provided by the applicants. Subsequently, the applicants, M/s Kunal Travels (Cargo), sought waiver of a penalty of Rs. 75,000 imposed under Section 114AA of the Customs Act, 1962.

Regarding the penalty issue, it was noted that the applicants, who were involved in the export of basmati rice, faced penalties due to the export of non-basmati rice, which was prohibited under the Import-Export Policy. The adjudicating authority had ordered confiscation of the non-basmati rice and imposed penalties on both the exporter and the Customs House Agent (CHA). The applicants contended that they had not acted mala fide, as all consignments were cleared after examination, and no evidence suggested their involvement in misdeclaration.

On one hand, the Revenue argued that the applicants failed to ascertain the nature of the goods and did not notify the Revenue about the prohibited non-basmati rice consignments. They claimed that the applicants' representative visited the exporter's premises and was aware of the export of non-basmati rice, justifying the penalty imposition. However, the Tribunal observed that no statement from the applicants' authorized representative was recorded, and there was no evidence implicating them in the misdeclaration.

Considering the circumstances, the Tribunal found a strong prima facie case in favor of the applicants. Consequently, the pre-deposit of the penalty was waived, and recovery stayed pending the appeal's disposal. The Tribunal allowed the stay petition, providing relief to the applicants in this matter.

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