Shipping agency wins appeal against penalty for demanding security deposit from CHA/importer under Customs Act

The appellant, a Shipping agency, appealed against a penalty reduction imposed by the Commissioner (Appeals) under the Customs Act. The penalty was for contravention of regulations by demanding a security deposit from a CHA/importer. The appellant cited a Tribunal judgment to contest the penalty imposition. The judge found the Facility Notice in question did not bind the Shipping Agency to transport containers to a specific CFS. Relying on the Tribunal's judgment, the judge allowed the appeal, setting aside the penalty.

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Issues:
1. Reduction of penalty imposed on the appellant by the Commissioner (Appeals).
2. Interpretation of Facility Notice No. 69/2011 issued by the Commissioner of Customs.
3. Compliance of Regulations and Orders by the Shipping Agency.
4. Justification for non-imposition of penalty based on a previous Tribunal judgment.

Analysis:
The appellant appealed against an Order-in-Appeal by the Commissioner (Appeals) that reduced the penalty from Rs. 1,00,000 to Rs. 50,000. The appellant, a Shipping agency, demanded a security deposit from the CHA/importer while agreeing to transport import containers to a specific CFS. The penalty was imposed under Section 117 of the Customs Act due to a contravention of the Handling of Cargo in Customs Areas Regulations, 2009, by violating Facility Notice No. 69/2011 issued by the Commissioner of Customs.

The appellant's counsel cited a Tribunal judgment in the case of CMA CGM Agencies (I) P. Ltd. vs. Commissioner of Customs (Import), Nhavasheva - 2014 (309) ELT 584 (Tri-Mumbai) to argue against the imposition of the penalty. On the other hand, the learned AR reiterated the Commissioner's findings regarding the penalty imposition.

The presiding judge examined the case as a dispute between private parties and analyzed Regulation 5(5) which mandates the Shipping Agency to comply with Rules, Regulations, Notifications, and Orders. The judge noted that the Facility Notice in question was not an order issued under the provisions of the Customs Act. The Facility Notice primarily aimed to facilitate and regulate the movement of containers, not to bind the shipping line to transport containers to a specific CFS at the request of the CHA.

In alignment with the Tribunal's judgment referenced by the appellant, the judge found no valid basis for the imposition of the penalty. Consequently, the appeal was allowed, and the impugned order was set aside. The judgment was dictated and pronounced in Open Court.

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