Law: Customs Rules, 2001

Section: 564(4)

Customs Rules, 2001---.--- ---.----R.564(4)---.---Interpretation of R. 564(4) of the Customs Rules, 2001---.---Scope---.---Export of fuel to International Security Assistance Force (ISAF) in Afghanistan---.---Variation in the quantity of fuel declared for export and the one certified by ISAF at the place of destination---.---Rule 564(4) of the Customs Rules, 2001 required that in case there was a variation of more than one percent in the quantity declared and the one certified by ISAF at the place of destination, action 'shall be taken' against the concerned carrier and other persons found involved---.---Post export audit showed that that fuel exported to Afghanistan was short supplied, which was in excess of the one percent permissible under R.564(4)---.---Petitioner-company, which was responsible for transporting the fuel, was issued show cause notices for the short supply---.---Collector of Customs, passed order-in-original requiring the petitioner to pay taxes and duties of the short supplies amounting to Rs.6,070,342/- along with default surcharge---.---Customs Appellate Tribunal reduced the quantum of duties and penalty from Rs.6,070,342 to Rs.3,622,683---.---Petitioner argued that a strict procedure was followed for delivery of fuel as the tankers were locked and sealed and yet evaporation in hot weather was bound to take place that could reach beyond one percent limit for which the petitioner could not be held responsible; that provisions of R. 564(4) of the Customs Rules, 2001, ought to be interpreted in a way that in case of variation beyond one percent, there should be some adjudication as to the real cause behind the shortage, and in case the carrier justified the loss for no fault of his own then he should not be penalized for the breach of the limit provided in the Rule---.---Validity---.---Consequence for short supply beyond one percent had been clearly provided in R. 564(4) of the Customs Rules, 2001, which rule was fully attracted to the case of the petitioner and accordingly applied in the present case---.---No legal error was committed by any of the forums below, which required interference from the Supreme Court---.---Petition was dismissed…

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