TaxTMI 
TaxTMI 
2026 (8) TMI 1535
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....mely, Tuticorin, India. The bill of Lading indicated the appellant, premised at Tuticorin, as the Agent of the consignee. The subject consignment had arrived at the Kattupalli Port which was to be used as transhipment port to ship the aforementioned consignment to the Port of Discharge, i.e., Tuticorin, through coastal vessel. 3. It is stated that owing to the non-availability of the coastal vessel for transporting the subject goods from Kattupalli Port to Tuticorin Port and in view of the accumulating detention and demurrage charges, the shipper, i.e. M/s. PGP International Pte. Ltd, Singapore decided to re-export the subject goods. Accordingly, the appellant made representations dated 05.02.2025 and 07.04.2025 to the Customs officers for the re-export of the subject goods, which has culminated in the impugned order which has, while permitting the re-export, imposed the said penalty. 4. Shri. Hari Radhakrishnan, Ld. Advocate, appearing for the appellant contended that the Adjudicating Authority has imposed the penalty without even alleging any contravention made by the appellant under the Customs Act, 1962. The appellant had paid the said penalty under protest in order to re....
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....ctions to the Customs Department to provide the Appellant with a demurrage waiver certificate till the Let Export Order was provided for re-export of the subject goods. 8. Shri. N. Satyanarayana, Ld. Authorised Representative, reiterated the findings in the impugned order. 9. Heard both sides and perused the materials available on record. 10. The sole issue that arises for determination is whether the penalty imposed by the Adjudicating Authority is tenable, and if not, as to what orders. 11. It is appropriate to notice Section 117 of the Customs Act, 1962, which is as below: "117. Penalties for contravention, etc., not expressly mentioned. Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to penalty not exceeding four lakh rupees." (emphasis supplied). 12. The section makes it clear that a penalty is not automatic and specific conditions only attract its imposition. Therefore, if a person contravenes any provision of t....
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.... Circular No. 100/2003 dated 28.11.2003, the Commissioner may use his discretion and allow re-export without the requirement of a "No Objection Certificate" from the Reserve Bank of India, on payment of a nominal penalty or without any penalty as he deems fit, provided that he is satisfied that the goods have been imported as a result of Bonafide Mistake and contrary to the importer's instructions. Circular No. 04/2015-Cus dated 20.1.2015 stipulates that the requests for re-export of imported goods may be received when the said goods are destinated for elsewhere, but which are inadvertently imported at a particular Customs station and that the permission for re export may be granted on merit by the officer concerned as per the adjudication powers. 8. I find that the consignment was manifested for Tuticorin Port via Kattupalli Port as transhipment port but could not be transhipped due to unavailability of the coastal vessel. Further, I find that the shipper M/s PGP International, Pte. Ltd. has also requested the return of the subject consignment back to him and the consignee i.e. M/s. Greenstar Fertilizers Limited, has also given No Objection in returning the said consi....
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.... 16. The scheme of Customs Act, on consideration, would indicate that the liability on account of an import intended for home consumption is linked with the definition of import under Section 2(23) read with the filing of a Bill of Entry under Section 46, and Section 15 that provides for the date of determination of rate of duty and tariff valuation of imported goods. Hence, till such time the goods are cleared for home consumption under Section 47, they remain subject to the statutory customs framework, including custody under Section 45. The Adjudicating Authority has found that the subject consignment is in transit and lying at the IGM stage only. Where the goods have not been cleared for home consumption or warehoused, the Act also contains provisions governing their export. 17. The Adjudicating Authority has also relied on the Circular No.04/2015-Cus as it accords sanction for the officer to grant permission to re-export as per the adjudication powers. 18. It is the exercise of the adjudication powers as per Section 122 of the Act, by the Adjudicating Authority in adjudging penalty in the instant case that is being further scrutinized. It is seen that the Adjudicator's ....
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....ief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out. (emphasis supplied) 21. It is also apposite to note that the Hon'ble Supreme Court in Sant Raj and another v. O.P.Singla and others, (1985)2 SCC 349, has held as under: "Whenever, it is said that something has to be done, within the discretion of the authority, then that something has to be done, according to the rules of reason and justice and not according to private opinion, according to law and not humour. It is to be not arbitrary, vague and fanciful but legal and regular and it must be exercised within the limit to which an honest man to the discharge of his office ought to find himself. (See Sharp v. Wekfield [1891] A.C.173. Discretion means sound discretion guided by law. It must be governed by rule, not by humour, it must not be arbitrary, vague and fanciful. (See S.D. Jaisinghani v. Union of India and Ors. [1967] 65 ITR 34 (SC)" 22. Again, ....
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....iety is involved. Was this adhered to by any of the authority? Unfortunately not. 48. Much was attempted to be made out of exercise of discretion in converting a site reserved for amenity as a civic amenity. Discretion is an effective tool in administration. But wrong notions about is results in ill-conceived consequences. In law, it provides an option to the authority concerned to adopt one or the other alternative. But a better, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it. Even where statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbitrarily. It should be guided by reasonableness and fairness. The legislature never intends its authority to abuse the law or use it unfairly..... (emphasis supplied) 23. Thus, it is too well settled a principle which has emerged over the years that where a statute vests discr....
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....arious provisions for cancellation of licence, suspension and imposition of penalty. When the waiver certificate is issued, it is the obligation on the part of the CCSP to honour the same and waive the charges. Further, the Act and the provisions do not carry any provision for payment of interest. Therefore, the only deterrent for noncompliance can be initiation of appropriate action against the CCSPs. Therefore, in cases, where the certificates are issued after conclusion of the adjudication proceedings in favour of the importer/exporter and if not complied, appropriate action may be initiated by the department by following the due process of law. (I) CONCLUSION & DIRECTIVES ISSUED: 45. On the basis of the above discussion and findings arrived at, our conclusions are as follows: (1) The writ petitions under Article 226 of the Constitution will be maintainable against the CCSPs as they are bound by the statutory regulations and thus, the writ petitions filed will be deemed to for the enforcement of a statutory right and thus maintainable. (2) The 2009 HCCA Regulations, and 2018 SCMT Regulations will prevail over the contract between the parties a....
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....ate appropriate proceedings by following the due procedures under the provisions. (12) In cases where any security has been encashed or where charges have been realized from the importer/exporter pending adjudication proceedings, which concluded in their favour, the importer/exporter is entitled to refund, which shall be made within four weeks from the date of receipt of this order. (13) As far as the claim for interest is concerned, it is open to the parties to approach the authority concerned, who shall consider the same and pass appropriate orders, on merits and in accordance with law. (14) It is open to the Central Government to look into the different timelines prescribed under the Act and the regulations and bring about appropriate changes to have uniform timelines and to bring in accountability. (15) The Board is directed to issue appropriate instructions in this regard and fix the liability on the officers responsible for the delay and take appropriate action against them." (emphasis supplied)" 27. In the circumstances of the present case, the goods are entitled to similar treatment. The jurisdictional Customs Authority is the....