Penalty for clearance during pending classification approval set aside where delay was not attributable to the assessee.

Penalty was not sustainable where goods were cleared while the classification list remained pending approval, because the list had been filed regularly, clearances were made on the basis of the earlier approved classification, and the delay in final approval was not attributable to the assessee. The assessee could not be expected to suspend clearances merely for want of formal approval, so no penal consequence followed for this technical lapse. The levy of penalty was therefore set aside in favour of the assessee.

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Issues: Whether penalty was sustainable for clearance of goods while the classification list remained pending approval.

Analysis: The classification list had been filed regularly and the goods were cleared on the basis of the earlier approved classification and the department's own handling of the returns and assessments. The delay in finalising the classification list was not attributable to the assessee, and the assessee could not be expected to stop clearances merely because approval had not been formally completed. In these circumstances, the assessee could not be visited with penal consequences for a technical clearance pending approval.

Conclusion: The levy of penalty was not warranted and was set aside in favour of the assessee.

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