2013 (11) TMI 89 - AT - Customs

Waiver of penalty - Mis-declaration of the Cigarette Filter Rods under the garb of sketch pen ink filler - Held that - when there was a mis-declaration of the Cigarette Filter Rods under the garb of sketch pen ink filler 66 MM long (Ink Pads). It clearly comes out from the adjudication order to appreciate that there was a proper application of mind by the adjudicating authority. The evidence before the authority was as appearing in the order. It was a clear admission of the mis-declaration and no scope was left for Revenue to grant any waiver from penalty. - stay denined. Enhancement of penalty imposed less then minimum prescribed - Held that - Contumacious conduct of the appellant warranted imposition of penalty to the equal amount of the duty. We surprise how Adjudicating Authority was lenient to impose penalty of Rs.85,000/- while redemption fine was Rs.1,50,000/- and duty element was 1,62,083 - Notice is hereby issued to the appellant to show cause as to why penalty under section 112A of Customs Act shall not be enhanced to the extent of the duty element.

Summary

Issues: Mis-declaration of goods, imposition of penalty, enhancement of penalty

Mis-declaration of goods:
The judgment addresses the issue of mis-declaration of goods, specifically relating to the misrepresentation of Cigarette Filter Rods as sketch pen ink filler 66 MM long (Ink Pads). The Tribunal notes that there was a clear mis-declaration as highlighted in the adjudication order, demonstrating a proper application of mind by the adjudicating authority. The evidence presented confirmed the mis-declaration, leaving no room for the Revenue to waive the penalty. Consequently, the stay application was dismissed, and the appellant was directed to deposit the entire penalty amount of Rs.85,000 within a specified timeframe.

Imposition of penalty:
The appellant's counsel sought a reduction in the penalty amount, arguing that the duty element had already been deposited. However, the Tribunal found no merit in this argument, emphasizing the appellant's contumacious conduct, which justified the imposition of a penalty equal to the duty amount. The Tribunal expressed surprise at the adjudicating authority's leniency in imposing a penalty of Rs.85,000 despite a redemption fine of Rs.1,50,000 and a duty element of Rs.1,62,083. Subsequently, a notice was issued to the appellant to show cause as to why the penalty under section 112A of the Customs Act should not be enhanced to match the duty element.

Enhancement of penalty:
In response to the appellant's plea for a reduction in penalty, the Tribunal decided to issue a notice to the appellant to explain why the penalty should not be increased to align with the duty element. The appellant was instructed to provide their explanation to the Tribunal, with a copy sent to the Revenue, by a specified date. This step indicates the Tribunal's intention to consider enhancing the penalty to correspond with the duty element, signaling a potential increase in the penalty amount based on the circumstances of the case.