2005 (5) TMI 423 - AT - Customs

Summary

Issues:
- Confirmation of duty demands and penalties under Sections 114A and 112(b) of the Customs Act, 1962.
- Reduction of penalty amount on the assessee.
- Penalty imposition on the Director.
- Upholding of interest liability.
- Disposal of appeals.

Analysis:
The case involves appeals by an assessee, a 100% EOU under the Central Excise Act, and its Director against the Commissioner's order confirming Customs duty, penalties, interest, and a penalty under Sections 114A and 112(b) of the Customs Act, 1962. The appellant was found to have sold imported yarn instead of using it in the EOU, leading to a duty demand of Rs. 11,64,313/-, which was paid. The Tribunal confirmed the duty demands as admitted. The duty discharge was made before the notice was issued, and the penalty was reduced to Rs. 2.5 lakhs on the assessee under Section 114A, considering the conduct but upholding the penalty. However, the penalty under Section 112(b) on the Director was set aside as there was no positive finding of liability for confiscation or order of confiscation under Section 111 of the Customs Act, 1962.

The Tribunal noted that the reason for the sale of goods in the open market was a financial crisis, and there was no charge of liability to confiscation or order of confiscation under Section 111. Therefore, the penalty under Section 112(b) on the Director was not sustained, and the appeal was allowed. The interest liability was upheld since the duty demand was confirmed. Consequently, the appeal of the assessee was partly allowed, and the appeal of the Director was allowed in full based on the findings. The Tribunal ordered the disposal of appeals accordingly, bringing the case to a conclusion.