2013 (8) TMI 469 - AT - Customs

Reduced penalty - appellant has allowed others to use his CHA licence and committed offence under Customs Act, 1962. - Held that - record does not reveal that the appellant had hatched conspiracy against Revenue - penalty of the magnitude of Rs. 20 lakhs may be disproportionate to the act of letting out of CHA licence not permitted by law quantum of penalty of Rs. 5 lakhs shall be reasonable - overall assessment of the facts depicted and finding that the appellant was not an abettor to the offence committed - penalty aspect should not be dealt leniently penal proceedings being quasi-criminal in nature, taking into consideration the civil punishment the appellant had already undergone penalty reduced from 20 lakhs to 5 lakhs - Appeal was allowed partly

Summary

Issues:
1. Appellant allowing others to use CHA licence under Customs Act, 1962.
2. Imposition of penalty of Rs. 20 lakhs on the appellant.
3. Consideration of penalty amount in light of circumstances and previous license cancellation.

Issue 1: Appellant allowing others to use CHA licence under Customs Act, 1962.

The judgment reflects that the appellant allowed others to use his CHA licence, which is considered an offence under the Customs Act, 1962. The appellant admitted to this act, leading to the imposition of a penalty of Rs. 20 lakhs. However, it was noted that there was no evidence of the appellant hatching a conspiracy against the Revenue, indicating that the penalty amount might be disproportionate to the offense committed. The appellant's CHA licence was canceled previously, and the Tribunal had rejected the appeal against the revocation. Therefore, the penalty was reduced to Rs. 5 lakhs to align with the circumstances and facts of the case.

Issue 2: Imposition of penalty of Rs. 20 lakhs on the appellant.

The judgment deliberated on the proportionality of the penalty imposed on the appellant for allowing the unauthorized use of the CHA licence. It was observed that while the appellant had committed an offense, the penalty amount of Rs. 20 lakhs might not be justifiable considering the absence of evidence of conspiracy against the Revenue. The Tribunal considered the cancellation of the appellant's CHA licence and the rejection of the appeal in determining the revised penalty amount of Rs. 5 lakhs. The decision to reduce the penalty was based on the quasi-criminal nature of penal proceedings and an overall assessment of the appellant's involvement in the offense.

Issue 3: Consideration of penalty amount in light of circumstances and previous license cancellation.

The judgment clarified that the reduction of the penalty to Rs. 5 lakhs was not a lenient approach but a result of a comprehensive evaluation of the appellant's situation. Despite the seriousness of penal proceedings, the Tribunal took into account the civil punishment already faced by the appellant and concluded that the penalty amount should be reasonable given the appellant's role as a non-abettor in the offense. The decision to partially allow the appeal was based on the assessment of facts, circumstances, and the appellant's previous legal history, ensuring a fair and just outcome in the case.

Conclusion:

The judgment by the Appellate Tribunal CESTAT NEW DELHI addressed the issue of the appellant allowing unauthorized use of the CHA licence under the Customs Act, 1962. It analyzed the imposition of a penalty of Rs. 20 lakhs, the proportionality of the penalty, and the subsequent reduction to Rs. 5 lakhs considering the circumstances and previous license cancellation. The decision highlighted the importance of a fair assessment in penal proceedings, resulting in a reasonable penalty amount based on the appellant's involvement in the offense.