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Judgment
The above appeal is filed against the order passed by the Commissioner (Appeals) who upheld the late fee charges imposed for delay in filing the
bills of entry.
The ld. Counsel Shri Aryaman Ghulati appeared for the appellant and argued the matter. The Goods and Service Tax Act, 2017 was brought into
effect from 1st July, 2017, as a consequence of which the appellant was required to obtain a registration under the said Act as provided under section
22 of the said Act. The portal for registration under GST was opened with effect from 25.6.2017, the website was not responding for few days and
the appellant was not able to register with the aforesaid CGST Act, until 3.7.2017, i.e. wen the appellant uploaded its application for registration. As
per terms of the Registration Rules under the GST Act, the GSTIN number would be allotted to the applicants within 3 working days of making the
application if otherwise was found to be in order. After 5 days from the date ono which the application for registration was submitted, the status was
the application was shown as “pending for Ordersâ€. The appellant submitted the second application dated 24.7.2017 and was approved and a
registration certificate was issued on 26.7.2017. Subsequently, the first application dated 3.7.2017 was also approved on 30.7.2017. The appellant filed
the bills of entry only on 2.8.2017 and 3.8.2017. There was a delay in filing the bills of entry; the late fee charges were levied. Against such late fee,
the appellant has filed the present appeal. He submitted that during the transition period, there was technical glitches in the system and it was difficult
to get GSTIN registration. The appellant initially applied for GSTIN registration 3.7.2017. They had not received registration even after 15 days. The
appellants were under the impression that the application had lapsed. They again filed for GSTIN registration on 24.7.2017. Meanwhile, they obtained
registration on 26.7.2017. The system imposed a late fee charge of Rs.14,55,000/- for late filing of bills of entry. Against such order of late fee
charges, the appellant approached the Hon'ble High Court. The Hon'ble High Court vide judgment dated 30.8.2018 remanded the matter for issuing a
speaking order with regard to imposition of late fee charges. In such proceedings, the original authority reduced the late fee charges to Rs.4,45,000/-.
It was held that the appellant had obtained GSTIN registration on 26.7.2017 and ought to have filed the bills of entry on the very same day instead
they have filed only on 2.8.2017 and 3.8.2017 with a delay of four to five days. It is submitted by ld. Counsel that since they had applied for GSTIN
registration for the second time, they were under confusion and were not able to file the bills of entry on time. Further, after obtaining GSTIN
registration on 26.7.2017, they had to get it approved / verified through ICEGATE and much time was taken for connectivity to the server of the site
and approval of GSTIN registration also was delayed. For these reasons, the bills of entry could not be filed within the time prescribed as per
Notification No. 26/2017 dated 31.3.2017.
He also adverted to Circular No. 12/2017-Cus. dated 31.8.2017 issued by CBEC on clarification of difficulties related to recent amendments in
Customs Act, 1962. He pointed out that in the said circular, it is stated that the importer should not be penalized for delay happening due to any system
related defect. The delay occurred only due to system related defect and therefore he prayed that the late fee charges may be set aside.
The ld. AR Shri M. Jagan Babu supported the findings in the impugned order. He strongly argued that the appellant had received the GSTIN
registration on 26.7.2017 and ought to have filed the bills of entry on the very same day. They have delayed the filing of bills of entry by four to five
days for which late fee charges imposed are legal and proper.
Heard both sides.
The issue is with regard late fee charges imposed for late filing of bills of entry. At the outset, it is to be stated that the cause of action in this appeal
has occurred during the transition period of introduction of GSTIN registration. There were much technical difficulties faced by assessee / importer /
exporter during that time due to system failure, server connectivity etc. There were many cases filed before the High Courts. In the present case also,
it is seen that the appellant could not obtain the GSTIN registration and had to apply for the second time. Being a new law, it is inferable that it is not
easy for the public to understand how to apply and pay the tax under a new law. Further, under Notification No. 26/2017 itself, it is stated that such
late fee can be waived if sufficient reasons are furnished before the proper officer. Thus, it is a condonable lapse. In the circular issued by Board
dated 31.8.2017, it is stated that the importer should not be penalized for delay happening due to any system related defect. For all these reasons and
most importantly since the period involved is during the transition period of GST, I am of the view that the late fee charges imposed is not warranted.
The impugned order is set aside and the appeal is allowed with consequential relief if any.
(Dictated in open court)