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Issues involved: Appeal against dropping penalty under Section 114A of the Customs Act.
Summary: The appeal before the Appellate Tribunal CESTAT, CHENNAI was regarding the Commissioner's decision to drop the department's proposal for imposing penalty on the respondents under Section 114A of the Customs Act. The Commissioner had given the benefit of doubt to the party and exonerated them from penal liability under Section 114A due to lack of evidence proving the actual date of the offence related to an import made in 1995. The department insisted on penalizing the respondents under Section 114A even if the offence was committed before the provision came into force on 28-9-96, arguing that subsequent proceedings after that date were sufficient. However, the Tribunal rejected this argument, emphasizing that the cause of action for a penalty under Section 114A arises on the date of import, which in this case was before 28-9-96. Therefore, the Tribunal held that Section 114A of the Customs Act was not applicable to the respondents and dismissed the appeal of the Revenue. The Tribunal noted that the offence alleged against the respondents was in relation to an import made in 1995, and the investigation did not establish the actual date of the offence. The Commissioner gave the benefit of doubt to the party and exonerated them from penal liability under Section 114A. The department argued that the respondents should be penalized under Section 114A even if the offence was committed before the provision came into force on 28-9-96, based on subsequent proceedings. However, the Tribunal rejected this argument, stating that the cause of action for a penalty under Section 114A arises on the date of import, which was before 28-9-96 in this case. The Tribunal emphasized that the penalty under Section 114A is consequential to the demand of duty under Section 28 of the Customs Act, and since the import in question took place before 28-9-96, Section 114A was not applicable to the respondents. Therefore, the Tribunal dismissed the appeal of the Revenue.
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