2014 (11) TMI 1102 - HC - Customs

Imposition of fine and penalty - Section 127B of the Customs Act - Held that - there is no error on the part of the Commission to impose redemption fine in the light of the fact that there is admission by the co-applicants before DRI that the value admitted was less than actual value under import. Therefore, in the facts and circumstances of the case, the petitioners cannot be heard to state that the market survey should be conducted in the light of the candid admission of applicants. Penalty imposed on company as well as co-applicant - Held that - This would require reconsideration in the light of the fact that already redemption fine has been imposed. Hence, to that extent, the impugned order calls for interference. Accordingly, the writ petition is partly allowed and the findings of the settlement commission insofar as it relates to penalty in Paragraph 15.1(d), (e) and (f) are set aside and the matter is remanded to the Settlement Commission for fresh consideration, to consider as to whether there is need for imposition of penalty on the company as well as the Directors of the Company. The petitioner has fully cooperated before the Officer as well as the Settlement Commission and paid the demand raised and the confirmation of redemption fine levied, such reconsideration shall be made by the Commission - first respondent, in accordance with law.

Summary

Issues:
Challenging imposition of fine and penalty by Settlement Commission.

Analysis:
The petitioner, an importer, received a show cause notice from the Directorate of Revenue Intelligence regarding the declared value of imported goods, confiscation, duty amount, unaccounted cash, and penalty imposition. The petitioner admitted duty liability and interest, which was allowed to proceed. The Jurisdictional Commissioner reported the intentional evasion of duty by the petitioner. The Settlement Commission found the petitioner and co-applicants complicit in customs duty evasion but cooperated during the investigation. The Commission ordered a refund of seized cash but imposed penalties on the company and its Managing Director. The petitioner contested the lack of complete immunity from fines and penalties, questioning the imposition of redemption fine without a market survey.

The respondent argued that the Settlement Commission's decision was based on relevant facts and legal principles, citing a Supreme Court case. The respondent emphasized that factual findings by the Commission should not be questioned by higher courts unless there is a violation of the law. The High Court reviewed the case, noting the Settlement Commission's observations on undervaluation of goods and evasion of customs duties. The Court upheld the redemption fine due to the applicants' admission of undervaluation. However, the Court found a lack of specific findings regarding the imposed penalties, leading to a remand of that aspect for further consideration by the Settlement Commission.

In conclusion, the High Court partially allowed the writ petition, setting aside the penalty findings and remanding the matter to the Settlement Commission for fresh consideration. The Court emphasized the need for a proper review of penalty imposition in light of the redemption fine already in place. The Commission was directed to reconsider the penalty issue in accordance with the law.