Commissioner Of Customs(Port), ... vs M/S.Pil (India) Pvt.Ltd

(Arising out of Order-in-Appeal No.KOL/CUS/CKP/95/2012 dated 08.05.2012 passed by the Commissioner(Appeals) of Customs, Kolkata.)

FOR APPROVAL AND SIGNATURE

HONBLE SHRI H.K.THAKUR, MEMBER(TECHNICAL)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT(Procedure) Rules, 1982 for publication in any Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

Commissioner of Customs(Port), Kolkata

Applicant (s)/Appellant (s)

Vs.

M/s.PIL (INDIA) PVT.LTD.

Respondent (s)

Appearance:

Shri S.P.Pal, Appraiser(AR) for the Revenue

NONE for the Respondent (s)

CORAM:

Honble Shri H.K.Thakur, Member(Technical)

Date of Hearing/Decision :- 18.09.2015 Date of Pronouncement :- 18.09.2015

ORDER NO.FO/A/75540/2015

Per Shri H.K.Thakur.

This Appeal has been filed by the Revenue against Order-in-Appeal No.KOL/CUS/CKP/95/2012 dated 08.05.2012 passed by the Commissioner(Appeals) Customs, Kolkata.

2. Shri S.P.Pal, Appraiser(AR) appearing on behalf of the Revenue argued that the period of dispute is 05.07.2006 to 22.12.2006 with respect to filing of EGMs by the Respondent. That Adjudicating authority imposed a penalty of Rs.90,000/- upon the present respondent on the ground that EGMs were filed after the sailing of the vessels. That first appellate authority in para 7 of the Order-in-Appeal dated 08.05.2012 allowed the appeal as per third proviso to Regulation-3 of the Export Manifest (Vessels) Regulations, 1976 which permitted that EGM could also be filed within seven days from the date of departure. It is the case of the Revenue that there was a provision in Section 41 of the Customs Act, 1962 up to 2004 when EGM could be filed within seven days from the date of departure of the vessel. That the said provision was omitted by Section 66 of the Finance Act, 2004. That after that day EGM could not be filed after departure of the vessel. That reliance placed by first appellate authority on Regulation-3(3) of Export Manifest (Vessels) Regulation 1976 is not proper as these Regulations are issued under Section 41 of the Customs Act, 1962 which itself was not permitting filing of EGM after departure of vessels during the relevant period. He relied upon the case law of Rashmi Metaliks Ltd. vs. UOI  [2015 (316) ELT 455(Cal)] to argue that subordinate delegated legislation should be in conformity with the substantive provisions of a statute. Learned AR, therefore, argued to set aside the Order-in-Appeal dated 08.05.2012 and restore Order-in-Original dated 16.02.2012 passed by the Adjudicating authority.

3. None appeared on behalf of the appellant on 24.08.2015 when the appeal was earlier listed for hearing after issue of notice. Also none appeared for hearing today. The notice of hearings have not been returned and there is no request for any adjournment form the Respondent.

4. Heard AR and perused the case records. The issue involved in the present proceedings is whether penalty can be imposed upon the Respondent under Section 117 of the Customs Act, 1962 for filing the EGMs after the date of sailing/departure of the vessel. First appellate authority has allowed the appeal relying upon Regulation 3(3) of the Export Manifest (Vessels) Regulation 1976. From a perusal of the case records and the Customs Act, 1962 it is observed that up to 2004 there was a provision permitting filing of EGM within 7 days of departure of vessel. The same also got included in Regulation 3(3) of the above Regulations. The provisions of Section 41 of the Customs Act, 1962 were omitted by the Finance Act, 2004 and this Section read as follows during the relevant time :-

(1) The person-in-charge of a conveyance carrying export goods shall, before departure of the conveyance from a customs station, deliver to the proper officer in the case of a vessel or aircraft, an export manifest, and in the case of a vehicle, an export report, in the prescribed form:

(2) The person delivering the export manifest or export report shall at the foot thereof make and subscribe to a declaration as to the truth of its contents.

(3) If the proper officer is satisfied that the export manifest or export report is in any way incorrect or incomplete and that there was no fraudulent intention, he may permit such manifest or report to be amended or supplemented.

4.1 Export Manifest (Vessels) Regulations, 1976 were framed in 1976 under the earlier provisions of Section 41 of the Customs Act, 1962 and corresponding amendments, denying EGM to be filed within seven days of date of departure in filing EGM, made in Section 41, could not be carried out in the said regulations. Appellant Revenue has relied upon the case law of Rashmi Metaliks Ltd. vs. UOI (supra) to argue that a subordinate Regulation cannot defect the provision of Section 41 of the Customs Act, 1962 after its amendment. Para 7 of this case law is reproduced below:-

7.The Customs (Provisional Duty Assessment) Regulation, 2011 is promulgated in exercise of power conferred under Section 56 of the Customs Act read with Section 18 of the said Act. It is a settled proposition of law that the subordinate/delegated legislation should be in conformity with the substantive provision of the statute, which is a source of its existence. If the provisions of the delegated legislation offends the substantive statutes or is contrary thereto, the same cannot withstand and is liable to be struck down. Where a regulation has been promulgated in exercise of the power conferred under the substantive statute, the endeavour of the Court should be to harmonize the provisions contained in both the substantive statute and regulation. Any interpretation which would render the regulation unworkable, should be avoided.

4.2 From the above factual matrix of the present appeal it is observed that an amendment was carried out in Section 41 of the Customs Act, 1962 but a corresponding amendment, regarding late filing of EGM upto 7 days of the departure of a vessel, could not be made in the Export Manifest (Vessels) Regulations, 1976. In view of the relied upon case law of jurisdictional High Court it has to be held that provisions contained in the Statute will prevail over the texts of regulations made thereunder. If the main Section of the Customs Act, 1962 was not permitting late filing of EGM during the relevant time then it can not be held that the same was permissible under the said regulation. Accordingly appeal filed by the Revenue is required ot be allowed.

5. In view of the above observations and settled proposition of law appeal filed by the Revenue is allowed by setting aside order dated 08.05.2012 passed by the first appellate authority and by restoring the Order-in-Original dated 16.02.2012 passed by Adjudicating Authority.

(Operative part of the order was pronounced in the open court.)

SD/

(H.K.THAKUR) MEMBER(TECHNICAL) sm

5 Appeal No.CA-219/12