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2005 (9) TMI 186 - AT - CustomsDenied Claim for EPCG benefit - Goods removed unauthorisedly from the customs area without the permission of the proper officer - Confiscation of Crude Distillation Unit Column/Vacuum Distillation Unit Column Vessels (CDU/VDU) - Import - Reassessment - Penalty - Bona fide - Wilful misstatement or suppression of fact - HELD THAT:- In the present case, there is no order of the proper authority permitting clearance for home consumption in terms of Section 47 of the Customs Act and the EPCG licence has been produced by the importers for debit by the proper officer before clearance of the imported goods and the bills of entry were provisionally assessed and there was no determination of duty u/s 28(2) at the time when the EPCG licences were produced for debit by the importers. Therefore, we hold that the benefit of EPCG licence/notification 49/2000-Cus. is available to the importers and that the goods ought to have been reassessed by extending the benefit thereunder. Both sides confirm that the amount of Rs. 5,83,81,368/- already paid by the importers is the duty payable on an application of the notification. We, therefore, hold that the above amount already paid by the importers represents the correct duty payable and accordingly set aside the duty liability confirmed in excess of Rs. 5,83,81,368/-. Confiscation is not challenged by the appellants and hence we uphold the same, but in the light of discussion and in view of the fact that the stand of the importers that the goods were removed in February 1999 after provisional assessment of the bills of entry by the proper officer on 26-2-1999 only due to space constraints and other operational problems at the jetty is not controverted by the Revenue, we reduce the fine to a token amount of Rs. 1,00,000/-. Penalty - As found earlier, the goods were in the original packed condition, in the manner in which they were imported, and no attempt had been made to use them, which would prove the bona fides of the appellant as importer and/or as Custodian. Therefore this is a fit case where the principles laid down by the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] and Akbar Baddruddin Jiwani v. CC [1990 (2) TMI 50 - SUPREME COURT] would apply. The Hon'ble Supreme Court has held that even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. We observe that a mountain has been made out of a mole hill by ordering confiscation and imposition of heavy redemption fines and penalties. The penalty is therefore required to be set aside in toto. We also note that penalty u/s 114A can be imposed only when duty has not been levied or has been short levied by reason of collusion or wilful misstatement or suppression of fact and the person liable to pay duty u/s 28(2) would in addition, be liable to penalty. We have already held that the provisions of Section 28 are not attracted against the importers and therefore penalty of amount equal to duty (although the impugned order does not refer to Section 114A while imposing penalty equal to duty, the show cause notice proposes penal action under Section 114A on the ground that the appellants are liable to pay the duty short levied as determined u/s 28(2) cannot be sustained and is therefore set aside. With regard to the appellants' role, as a custodian, we find that the provisions of Section 45 of the Customs Act, 1962 permit the proper officer to permit the custodian to remove goods from the Customs area, after obtaining written permission of the proper officer. The appellants claim to have applied for such a permission. Since after examination of the facts on record, the Commissioner does not dispute the appellants contention that there was shortage of space and that movement of goods from the customs area was necessitated due to concern of the safety of the goods, we do not see any reason as to why such a permission, if applied for or not, should not have been granted by the Commissioner. The Commissioner, in the impugned order, does not record anywhere that the circumstances of the case did not warrant grant of such a permission. If that had been the finding of the Commissioner, surely, the infraction of Section 45 would have been a substantive one and not merely procedural, while the provisions of Section 45 are procedural. In the absence of such a finding, we hold that non-obtaining of prior written permission from the proper officer would get reduced to a condonable breach for which a penalty is not justified. The penalty imposed under the provisions of Section 112 of the Customs Act, 1962 cannot be upheld. To sum up, we order as under :- (a) Liability of the imported goods to confiscation is upheld as it is not challenged. (b) Redemption fine in lieu of confiscation is reduced to Rs. 1,00,000/-. (c) EPCG licence covering the goods in question is accepted. (d) Duty of Rs. 5,83,81,368/- already paid is the correct duty payable. (e) The duty demand in excess of the amount already paid is set aside. (f) Penalty equal to duty amount is set aside. (g) Penalty u/s112 is also set aside. The appeal is thus partly allowed in the above terms.
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