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2021 (7) TMI 856 - AT - CustomsFailure to file EGM - responsibility of the appellant to file the EGM to the proper officer before departure of the conveyance from the Customs station - violation of Section 41 of the Customs Act, 1962 - penalty under Section 117 of the Act - HELD THAT:- The appellant is not master of the vessel but only vessel operator / shipping line who has filed the EGM on behalf of the master of the vessel. As per Rule 96 of the CGST Rules, 2017, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported, out of India, once both EGM and valid return in Form GSTR-3/GSTRB are furnished by the applicant. The IGST Refund module for exports has an inbuilt procedure to automatically grant refund after validating the Shipping Bill date against the GST Returns. The common errors and combination of errors hinders the problem of refund of IGST paid against exports. In Circular No.1/2019-Cus., F.No.450/119/2017-Cus-IV, dated 02.01.2019, the department has put forward resolutions to solve the problem of EGM errors which hamper IGST refund processing - only for continued non-compliance beyond 1.4.2019 the penalty is required to be imposed. In the present case, on receiving the notice from the department, the appellant has immediately rectified the defect. There is no allegation of continued non-compliance. The facts brought to light established that the error was only due to inadvertent omission / system error etc. Penalty u/s 117 of CA - HELD THAT:- Penalty is a form of punishment by recovery of an amount from the offender. It is a form of pecuniary punishment inflicted by law for its violation. If there was no willful intention / wrongful mind for violating the law and such violation occurred was only due to inadvertent omission / system error, imposition of penalty is unwarranted. If there was continued non-compliance even after the errors being pointed out by the department, the circumstances would have been different and penalty may be imposable. It is also to be stated that after the amendment to Section 41, the section itself provides for penalty not exceeding ₹ 50,000/-. That too only if proper officer is satisfied that there is no sufficient cause for delay in filing EGM. This being so, the invocation of Section 117 is not legal or proper. Appeal allowed - decided in favor of appellant.
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