2008 (2) TMI 888 - AT - Customs

Summary

Issues:
1. Confirmation of duty and penalty imposition under Section 114A.
2. Applicability of Section 114A for penalty imposition.
3. Redemption fine reduction.

Analysis:

1. Confirmation of Duty and Penalty Imposition under Section 114A:
The case involved a show cause notice issued to a 100% EOU for the shortage of duty-free imported Polyester Filament Yarn (PFY) found during a physical inventory check. The Joint Commissioner confirmed the duty demand of &8377;2,20,952 on the 7200 kgs of PFY and imposed a penalty of equal amount under Section 114A. The Commissioner (Appeals) upheld the duty demand but reduced the redemption fine from &8377;2 lakhs to &8377;1 lakh. The appellant did not dispute the duty confirmation but contested the penalty imposition under Section 114A, arguing that penalty for contraventions under Sections 111(o) and 111(j) should be imposed under Section 112 of the Customs Act.

2. Applicability of Section 114A for Penalty Imposition:
The appellant relied on a Tribunal decision in a similar case to support their argument against the penalty imposition under Section 114A. The Tribunal's decision highlighted that penalties for contraventions under Sections 111(o) and 111(j) cannot be imposed under Section 114A. Following the precedent, the Member (J) set aside the personal penalty of &8377;2,20,952 imposed on the appellant under Section 114A. However, the duty amount was upheld as the goods were not used for the intended purpose. The penalty imposed under Section 112(b) was reduced to &8377;30,000, which was deemed adequate.

3. Redemption Fine Reduction:
The appellant also sought a reduction in the redemption fine imposed for the seized PFY. The Commissioner (Appeals) had already reduced the fine from &8377;2 lakhs to &8377;1 lakh. The Member (J) found no justifiable reasons for further reduction and confirmed the redemption fine at &8377;1 lakh. Apart from setting aside the personal penalty under Section 114A, the appeal was rejected in all other aspects.

In conclusion, the judgment addressed the issues of duty confirmation, penalty imposition under Section 114A, and redemption fine reduction in a detailed manner, providing legal reasoning based on precedents and specific provisions of the Customs Act. The decision highlighted the importance of correctly applying penalty provisions based on the nature of contraventions and upheld the duty demand while modifying the penalties imposed on the appellant.