Case Note & Summary
The Principal Commissioner of Customs, Pune, filed an appeal under Section 130 of the Customs Act, 1962 against the final order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, dated 17th September 2019. The CESTAT had set aside the late fee of Rs. 1,00,000 imposed by the adjudicating authority on JSW Steel Ltd. for delayed filing of a Bill of Entry. The respondent, JSW Steel Ltd., had imported 98,450 metric tons of Goonyella C Coking Coal, which arrived at Marmagao Port on 14th April 2017. The Bill of Entry was filed on 20th April 2017, which was beyond the prescribed period under Section 46(3) of the Customs Act. The respondent argued that the delay was due to a bona fide mistake as part of the cargo was wrongly discharged at Jaigad Port, and there was no revenue loss. The adjudicating authority imposed a late fee of Rs. 1,00,000, which was set aside by CESTAT on the ground that the delay was not intentional and there was no revenue loss. The High Court framed the question of law whether the late fee under Section 46(3) is mandatory or discretionary. The Court analyzed Section 46(3), which states that a Bill of Entry shall be filed within a prescribed period, and if not, the importer shall pay late fee at the prescribed rate. The Court held that the use of 'shall' makes the late fee mandatory, and the adjudicating authority has no discretion to reduce or waive it. The Court also noted that circulars cannot override statutory provisions. The Court allowed the appeal, set aside the CESTAT order, and restored the late fee imposed by the adjudicating authority.
Headnote
A) Customs Law - Late Fee for Delayed Filing of Bill of Entry - Section 46(3) of Customs Act, 1962 - Mandatory Nature - The issue was whether late fee under Section 46(3) is mandatory or discretionary. The Court held that the use of 'shall' in Section 46(3) makes the late fee mandatory and not discretionary. CESTAT erred in setting aside the late fee on grounds of bona fides and no revenue loss. The adjudicating authority has no power to reduce or waive the late fee. (Paras 1-18) B) Customs Law - Interpretation of Statutes - Use of 'Shall' - Section 46(3) of Customs Act, 1962 - The Court interpreted the word 'shall' in Section 46(3) as mandatory, leaving no discretion to the authority. The provision requires payment of late fee at the prescribed rate for delayed filing. (Paras 10-12) C) Customs Law - Circulars and Statutory Provisions - Section 46(3) of Customs Act, 1962 - Circulars cannot override statutory provisions. The Court held that even if circulars provide for waiver or reduction, they cannot override the mandatory statutory requirement of late fee under Section 46(3). (Paras 13-15)
Issue of Consideration
Whether the late fee under Section 46(3) of the Customs Act, 1962 for delayed filing of Bill of Entry is mandatory or discretionary, and whether CESTAT was justified in setting aside the late fee imposed by the adjudicating authority.
Final Decision
Appeal allowed. Order of CESTAT set aside. Late fee of Rs. 1,00,000 imposed by adjudicating authority restored.
Law Points
- Late fee under Section 46(3) of Customs Act
- 1962 is mandatory for delayed filing of Bill of Entry
- CESTAT cannot waive it on grounds of bona fides or no revenue loss
- Section 46(3) uses 'shall' indicating mandatory nature
- Customs Act does not provide discretion to adjudicating authority to reduce or waive late fee
- Circulars cannot override statutory provisions
