2013 (12) TMI 766 - AT - Customs

Penalty under Section 112(a) - Violation of the conditions of Notification No.52/2003-Cus. ibid read with the provisions of Sections 61 and 72 of the Customs Act - Commissioner ordered confiscation of imported goods but refrained from imposing penalties - Held that - For a penalty to be imposed under Section 112(a) of the Act, the person sought to be penalized should be shown to have committed any one or more of the violations specified under Section 111 of the Act, which has not been done in the present cases. The appellant has not shown that the respondents rendered the goods liable to confiscation under Section 111 of the Act. Therefore the prayer in the appeals cannot be acceded to - Decided against Revenue.

Summary

Issues:
Appeal by department for confiscation of goods and imposition of penalties under Customs Act.

Analysis:
The case involved two appeals by the department against STP units operating under the 100% EOU scheme. The units had imported capital goods for software development under a bonded warehouse license. Some of the warehoused goods became obsolete, while others exceeded their bonding period without extension. The customs authorities sought to recover duty and proposed confiscation under relevant provisions. The Commissioner of Customs appropriated duty payments made by the respondents and held the goods liable to confiscation, refraining from imposing penalties. The department appealed for confiscation and penalties under specific sections of the Customs Act.

Upon review, the Tribunal found no valid reason to impose penalties on the respondents. To impose a penalty under Section 112(a) of the Act, violations specified under Section 111 needed to be established, which was not done in this case. The Tribunal noted that the respondents did not render the goods liable to confiscation under Section 111. The Tribunal also distinguished the facts of the current case from previous cases cited in the appeal, finding them not applicable. As a result, both appeals were dismissed.

This judgment clarifies the requirements for imposing penalties under the Customs Act and highlights the necessity of establishing violations specified under relevant sections. The decision emphasizes the need for a clear link between alleged violations and the penalties sought, ensuring a fair and justified application of penalties in customs-related cases.