2010 (10) TMI 382 - AT - Customs

Quantum of penalty u/s 112 - Contention of the Revenue is that the minimum penalty should be Rs. 5,000/ - as per the provisions of Section 112 - The lower appellate authority held that under Section 112, the upper limit of penalty has been specific but no minimum penalty has been prescribed under that section - As per the decision of tribunal CCE, Kanpur v. Ajay Jain (2008 -TMI - 33637 - CESTAT NEW DELHI) wherein this Tribunal while confirming the penalty under Rule 26 of the Central Excise Rules, 2002 on the identical worded provisions held that there is no description of the minimum penalty to be imposed. - Held that there is no minimum penalty prescribed in the section hence it is the discretion of the adjudicating authority to impose minimum penalty - The appeals filed by the Revenue are rejected.

Summary

Issues:
Quantum of penalty under Section 112 of the Customs Act.

Analysis:
The appeal was filed by the Revenue against an order enhancing the penalty under Section 112 of the Customs Act, 1962. The issue at hand was the quantum of penalty imposed on the respondents by the adjudicating authority. The Revenue contended that the minimum penalty should be Rs. 5,000 in each case as per the provisions of Section 112. However, none appeared on behalf of the respondents during the proceedings.

The lower appellate authority examined the issue in detail and noted that while Section 112 of the Customs Act specifies an upper limit for penalties, it does not prescribe a minimum penalty. The authority referred to previous decisions, including CCE, Kanpur v. Vijay Kumar Agrawal and CCE, Kanpur v. Ajay Jain, where it was held that there is no specific mention of a minimum penalty to be imposed under similar provisions. Based on this analysis, the lower appellate authority concluded that the adjudicating authority had the discretion to impose penalties within its powers.

After reviewing the cited decisions, the judge observed that since there is no minimum penalty prescribed in the section, it is within the adjudicating authority's discretion to determine the penalty amount. In this case, the adjudicating authority had exercised its discretion in imposing the penalties on the respondents. Consequently, the judge found no grounds to interfere with the impugned orders and upheld the penalties imposed, ultimately rejecting the appeals filed by the Revenue.

The judgment was pronounced in open court on 26-10-2010 by Shri Ashok Jindal, JJ.