2011 (2) TMI 1076 - AT - Customs

Penalty under Section 112 of the Customs Act - misdeclaration and undervaluation - Held that - As description of the machine was misdeclared vis-a-vis its different description mentioned in his agreement with the U.S. supplier. The Commissioner has also found that the appellant had admitted that he did not import the machine in question in his firm s name - Commissioner constitute a valid ground for penalty under Section 112 of the Customs Act and, consequently, this appeal cannot be allowed, appeal is dismissed - reduce the quantum of penalty to Rs.2,00,000/-

Summary

Issues:

1. Challenge against penalty imposed under Section 112 of the Customs Act.
2. Comparison with a previous order involving a different individual.
3. Lack of distinct grounds in the memorandum of appeal.
4. Commissioner's findings regarding the appellant's involvement in misdeclaration.
5. Quantum of penalty imposed and its reduction.

Analysis:

1. The appellant challenged a penalty of Rs.25 lakhs under Section 112 of the Customs Act. The Commissioner imposed the penalty based on the appellant's involvement in the clearance of goods with misdeclaration and undervaluation. The appellant referenced a previous order where a penalty on another individual was set aside due to lack of evidence of awareness of misdeclaration. However, the circumstances of the present case were deemed different, and the appellant failed to provide distinct grounds in the appeal.

2. The appellant contended that they were only the local buyer of imported machinery and not involved in misdeclaration. The Commissioner's findings indicated the appellant's direct involvement, including placing an order with the importer, admitting misdeclaration, and not importing the machine in their firm's name due to the local agent's role. The appellant's generalized denial without challenging specific findings was noted.

3. Despite upholding the validity of the Commissioner's findings as a basis for penalty, the Tribunal found the imposed penalty of Rs.25 lakhs excessive compared to a previous case with a penalty of Rs.2 lakhs for a similar offense. The Tribunal reduced the penalty to Rs.2,00,000 considering the circumstances. The appeal was ultimately dismissed with the modified penalty amount.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, Commissioner's findings, and the Tribunal's decision, providing a detailed overview of the legal proceedings and outcome.