Tribunal remands matter to Adjudicating Authority, sets aside Orders-in-Appeal

The Tribunal allowed the appeals by remanding the matter to the Adjudicating authority, setting aside the Orders-in-Appeal passed by the first appellate authority. The Tribunal directed a remand to the adjudicating authority to provide copies of relevant orders and pass suitable orders after affording the appellant a personal hearing, keeping all issues open for further consideration.

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Issues:
Penalties under Section 117 of the Customs Act, 1962 for not seeking extension of warehousing period.

Analysis:
The appellant filed appeals against OIA No. 36-55/2014/CUS/COMMR-A-/KDL dated 13.02.2014, where penalties were reduced from Rs. One lakh to &8377; 25,000/- by the first appellate authority. The penalties had been paid by the appellant before filing the appeals. The Advocate for the appellant argued that no penalty is prescribed under Section 61(1) and 72(1) of the Customs Act, 1962, emphasizing that the Adjudicating authority had not decided on the duty and interest aspects raised in the show cause notice. The appellant had complied with the requirement to either re-export the goods or supply them as ship stores within the time granted. The Advocate contended that as there was no violation or defiance of the Customs Act, penalties under Section 117 were not warranted.

The Advocate further argued that the warehouse period of one year was not applicable for ship stores at Kandla Customs House, as no extension requests were made for such goods. The appellant believed that no specific extension application was required under Section 61(1) of the Customs Act, 1962, based on the practice at Kandla during the relevant period. On the other hand, the Revenue argued that Section 117 does not require mens rea for imposing penalties, and any violation of the Customs Act attracts penalty, citing the failure to seek extension after one year of warehousing as sufficient cause for penalty imposition. The first appellate authority had reduced the penalty from Rs. One lakh to &8377; 25,000/- in each case.

The Tribunal considered the arguments and case records to determine whether penalties were warranted for not seeking an extension of the warehousing period under Section 61(1) of the Customs Act, 1962. The show cause notice demanded duties, interest, and penalties under Sections 61, 71, and 117 of the Act. While duties and interest were not confirmed, the appellant was given time to comply with re-export or supply requirements, which was fulfilled. Regarding penalties, the Tribunal noted the absence of a practice at Kandla Customs House to request extensions for warehoused goods supplied as ship stores, as indicated in the appeal memoranda. The Tribunal directed a remand to the adjudicating authority to provide copies of relevant orders and pass suitable orders after affording the appellant a personal hearing, keeping all issues open for further consideration.

In conclusion, the appeals were allowed by remanding the matter to the Adjudicating authority, setting aside the Orders-in-Appeal passed by the first appellate authority.

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