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TMI Blog2012 (10) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... is taken up for de novo consideration. 2. Brief facts of the case are that the applicant is engaged in the business of transporting people by Air on international routes. The applicant was required to collect from all passengers embarking on an international journey a Foreign Travel Tax at the rate of Rs. 500/- for every such journey to a place outside India. The amounts so collected as Foreign Travel Tax is required to be deposited in Government Account/Treasury in accordance with the Foreign Travel Tax Rules, 1979/FTT (Amendment) Rules, 2003 (hereinafter referred to as the said Rules) within a specified period. They are also required to file the Return in Form-2 showing the particulars of flights operated and the amount of foreign travel tax collected and paid into the treasury together with the attested copy of manifest, TR6 Challan, voucher and other relevant documents for each month within 30 days from the end of the month to which the return relates. 2.1 There was delay on their part on three occasions in depositing the Foreign Travel Tax as mentioned below :- (a) 27 days delay in depositing Foreign Travel Tax aggregating to Rs. 23,58,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that there is no time limit provided for imposition of penalty under the said Act. 2.5 Being aggrieved by this Order, the applicant preferred an Appeal to the Commissioner of Customs (Appeals) who by an Order dated 11th October, 2005 dismissed the Applicant's Appeal and upheld the imposition of penalty of Rs. 18,27,630/- under Section 38(3) of the said Act. 3. Being aggrieved by this Order-in-Appeal, the applicant has filed this Revision Application before this authority, which, after due consideration of submissions as made therein was rejected vide G.O.I. final order No. 141/09-Cus., dated 2-7-2009 on time limitation being time barred as per law, since applicant had filed revision application on 3-1-2008 against Order-in-Appeal dated 11-10-2005, after a time gap of 2 years. On having been aggrieved by the above Government of India orders dated 2-7-2009 the applicant filed a W.P. No. 63/2010 before the Hon'ble High Court of Bombay who disposed of the same by passing the below mentioned orders :- "We are convinced by the fact that the petitioner's contention relating to the question of limitation was neither raised by the respondents nor by the Revisional Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on Section 27 of the General Clauses Act :- (i) 1981 - 2 SCC (Page 535) Sh. Harcharan Singh (ii) 2007 - 6 SCC (Page 555) C.C. Alavi Haiji (iii) 2006 (202) E.L.T. 244 (T.-L.B.) Margura Ind. Ltd. (iv) 2010 (252) E.L.T. 242 (T) Rajesh Textile Ind. (v) 2009 (247) E.L.T. 737 (T) Varsha International. 3.2 The present proceedings commenced by the three Show Cause Notices dated 6th March, 2004 are bad-in-law as in respect of the same alleged offences of late deposit of Foreign Travel Tax, the Respondent had already issued three Show Cause Notices earlier and the Order passed thereon imposing penalty had been set aside by the Commissioner (Appeals) and accepted by the Respondent. (a) It is submitted that when a particular ground which could have been made a ground of an attack in the Show Cause Notice has not been invoked. It must follow that the Department had advisedly decided to not to press/invoke that particular ground of attack. In the earlier three Show Cause Notices for the same offences no Notices for imposition of penalty under Section 38(3) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only 5,000/- under Section 38 of the said Act, 1979. (b) On 13th October, 2003 by Notification No. 1/2003 issued by Central Government under Section 40 of the said Act, Rule 11 of the said Rules was amended to remove the proviso thereto which provided a cap of Rs. 5,000/- on the officers of Customs imposing a penalty under Section 38 of the said Act, 1979. A copy of the Notification dated 13th October, 2003 was handed over at the hearing. It was submitted that such an amendment cannot be retrospective so as to enable the Department to impose of penalty in excess of Rs. 5,000/-. It is further submitted that the Notification has been issued in terms of Section 40 of the Finance Act, 1979 which does not empower the Central Government to make Rules with retrospective effect. Consequently, the amendment to Rule 11 made on 13th October, 2003 cannot be given a retrospective effect. In support of the aforesaid submission that giving retrospective effect to Notification will be beyond the Rule making power of the authority, reliance is placed upon the decision of the Supreme Court in the matter of Cannanore Spinning & Weaving Mills reported in 1978 (2) E.L.T. 375. Further attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act 1979 which applies only in cases of failure to pay the Foreign Travel Tax which admittedly is not the case here. It is submitted that assuming penalty is at all imposable the appropriate Section would be Section 38(4) of the said Act 1979 which imposes a maximum penalty of Rs. 50,000/-. 3.6 Attention is invited to Section 38(3) of the said Act which provides for imposition of penalty for failure to pay/deposit the Foreign Travel in accordance with Section 35 of the said Act read with the said Rules. In this case admittedly the Foreign Travel Tax has been paid/deposited along with interest much prior to the issue of the show cause notice and therefore on the date of the notice there was no failure to pay/deposit the Foreign Travel Tax. In the circumstances the only provision applicable for imposition of penalty which has not been invoked in the notice was Section 38(4) of the said Act 1979 which provides for a maximum penalty of Rs. 50,000/-. 3.7 The applicant while citing non-retrospective applicability of the amended provision of Rule 11 interpreted the limit of imposable minimum 1/5th of amount as penalty as Rs. 5000/- only. Reliance was placed on below m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) In W.P. No. 3269 of 2004 - M/s. Sandi Arabian Airlines. (iii) In W.P. No. 3918 of 2005 - M/s. North West Airlines. (iv) In W.P. No. 2552 of 2006 - M/s. Kenya Airways Ltd. 5. Govt. has considered both oral and written submissions of the applicant. Govt. has also perused the orders passed by the Hon'ble Bombay High Court and by the lower authorities. 6. Government decides to first take up the issue of time limitation. From the perusal of records and texts/enclosures of further affidavit/submissions as made before the Hon'ble High Court of Mumbai, it is observed that the impugned Order-in-Appeal No. 209/2005/B dated 5-10-2005 was issued/dispatched on 11-10-2005 vide a dispatch No. 840 of the relevant record. The dispatch details bears the F.No. S/49-12/05 B and further Order-in-Appeal No. 209/05 B addressed to M/s. British Airways. No doubt, it does not bears the further detailed office address of the applicant, but on perusal of the such regular dispatches as was maintained in relevant records, it is seen that all dispatches are entered in the dispatch register in the same manner. If the contention of the applicants about non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod or even extended period and has not given any reason for the delay. When the delay is within the condonable limit laid down by the statute the discretion vested in the authority to condone such delay is to be exercised following the guidelines laid down by the Hon'ble Supreme Court [1987 (28) E.L.T. 185 (S.C.)] but when there is no such condonable limit and the claim is filed beyond the time period prescribed by the statute then there is no discretion to any authority to extend this time limit. Hon'ble Supreme Court in the case of Union of India v. Kirloskar Pneumatics C., 1996 (84) E.L.T. 401 (S.C.) held that the Customs authorities who are the creatures of the Customs Act, cannot ignore the time limit prescribed under the Customs Act. Rule 15 of the Foreign Travel Tax Rules, 1979 provides for time limit and there is no provision to extend this time limit. The authorities functioning under the rules cannot act contrary to the limit laid down in Rule 15 of the Foreign Travel Tax Rules, 1979. The ratio of abovesaid judgment of Hon'ble Supreme is squarely applicable in this case. In view of this position, the revision application filed by applicant is hit by time limitation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority to dilute it or not to impose it at all. Similar provisions have also been made in Rules 25, 26, 27 of the Central Excise Rules, 2002 wherein the adjudicating officer has to impose the penalties mentioned therein. Similar provision have also been made in the Customs Act, 1962 especially in Sections 112, 113, 114 and 114AA wherein the minimum & maximum penalty to be imposed has been prescribed in the Sections itself and the Customs officers have to implement them in letter and spirit, and they can not act contrary to the statute. 10. Government further observes that there is no dispute that there had been delay of 27 days, 11 days and 5 days in mandatorily depositing of the impugned foreign travel tax amounts collected during the relevant three months, there is also no dispute regarding liability/responsibility of the applicant for depositing the same and therefore in contravention thereof the applicant was liable to pay all the legally imposable penalties for such delays. Now let us peruse Section 38(3) of the Act which reads as under : "Every carrier or other person who fails to pay the inland air travel tax to the credit of Central Govt. under sub-section (2) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and delegated legislation, the former shall prevail in as much as delegated legislation must be read in the context of the primary/legislative act and not the vice-versa.", being law of the land are to be religiously followed. 13. Here, Govt. also wants to impress upon that there is no such express provisions under the law which stipulates that when proceedings under provisions of particular Rules stands concluded than no further show cause notices under separate Section and/or other provisions of Acts/Rules can be issued. Here, Government is of the opinion that the same ground and very same exhausted provisions of law should not be repeated but when the subject matter further extends to other investigation and/or appeal proceedings than it is a legal requirement that the other remained and wanted provisions of Sections/Rules which were not raised earlier must be raised and made to reach upto the stage of legally required finality. Herein, Government thinks that subsequently issued three show cause notices were very much legal and proper. Moreover, Commissioner (Appeal) had decided vide Order-in-Appeal dated 7-1-2003 that department is at liberty to issue fresh Show Cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 1989 relating to IATT upheld the minimum of 1/5th quantum of involved amount as imposable under Section 46(3) ibid. The Hon'ble High Court concluded it's judgment by following final observations. "The last argument which was raised by the learned senior counsel for the petitioner was that the ingredient of mens rea should be read into Section 46(3) of the Act. We do not agree because similar provisions exist in various tax legislations and the language of Section 46(3) itself does not allow itself to be interpreted as to include the requirement of mens rea. In fact, if mens rea would be read into the provision, then, grave harm and prejudice will be caused to the Central Government thereby leading to huge losses of revenue because every Airline may urge an explanation thereby contending absence of mens rea and which will effectively render the provision of penalty an otiose provision. The intention of the legislature in fact becomes further clear from insertion of Section 46B by Section 66 of the 2003 Finance Act whereby the failure to pay the IATT collected has been held to be punishable with a rigorous imprisonment for term which shall not be less than three months but wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the statutory period of fifteen days, then such person is well within the sweep of the words "failure to pay". Once the period of fifteen days is over and breach in payment of tax is committed, then it is immaterial when the defaulter in future is making the payment. Had there been no minimum penalty prescribed under sub-section (3) of section 38 of the Act, it would have been open for the adjudicating authority to consider the conduct of the defaulter and the extent of delay taking into account the extenuating circumstances while imposing penalty. But once the statute prescribes the minimum penalty without giving any discretion in favour of the adjudicating authority, then one has to go by the provisions of the Act. Para 63.........................."The language of section 38(3) shows that the provision is in absolute terms and in the matter of imposition of penalty the discretion of the authorities is limited to it being not less than one-fifth of the amount of tax not so paid and the upper limit extends upto three times of the amount of tax involved." Lastly for the argument of the Applicant about the legality of the separately issued Show Cause Notices for penalty under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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