9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 11 - HC - CustomsPower of tribunal - Reduction in penalty - Whether the Tribunal was justified in modifying the penalty imposed under Section 114A of the Customs Act in respect of misdeclaration, where duty demand has been confirmed - Held that - there was no discretion vested with the Tribunal to reduce the quantum of penalty than what is provided in terms of the Statute - In view of the categorical statement of law and taking note of the specific provision of Section 114A where there is a specific mandate that the importer shall be liable to pay penalty equal to the duty or interest so determined by the authority concerned, when there is a mis-declaration the Tribunal is not justified in reducing the penalty imposed under Section 114A of the Customs Act. Such a mandate under the Statute cannot be given a go-by by the Tribunal - Following decision of Commissioner of Central Excise, Delhi -II V. Bisht Electronics reported in 2011 (9) TMI 128 - DELHI HIGH COURT - Decided in favour of Revenue.
Issues:
1. Whether the Tribunal was justified in modifying the penalty imposed under Section 114A of the Customs Act in respect of misdeclaration where duty demand has been confirmed? Analysis: 1. The case involved Civil Miscellaneous Appeals filed by the Revenue under Section 130 of the Customs Act, 1962 against an order made by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The appeals were related to three importers of leather chemicals who had availed the benefit of exemption under the Duty Exemption Entitlement Scheme (DEEC Scheme). 2. The Directorate of Revenue Intelligence found that the goods were mis-declared, leading to show cause notices for confiscation of the goods under Section 111 of the Customs Act and recovery of duty under Section 28(1) of the Customs Act, along with the imposition of penalty under Section 114A of the Customs Act. 3. The Adjudicating Authority confirmed mis-declaration, leading to confiscation of goods, duty demand under Section 28 of the Customs Act, and imposition of penalties under Section 114A. Appeals were filed by the importers before the Tribunal, which confirmed the findings related to confiscation and duty recovery but reduced the penalties imposed under Section 114A. 4. The Tribunal reduced the penalties in the cases of KRM International, Dhandapani Exports Ltd., and Aisha International. However, the appeal related to Aisha International was dismissed as no penalty under Section 114A was imposed against them. 5. The issue of reducing penalties came under scrutiny in light of Section 114A of the Customs Act, which mandates a penalty equal to the duty or interest determined. The Supreme Court decisions in Union of India v. Dharamendra Textile Processors and Union of India v. Rajasthan Spinning and Weaving Mills clarified that penalties under such provisions are mandatory and cannot be reduced at the discretion of authorities. 6. The Delhi High Court also emphasized in Commissioner of Central Excise, Delhi -II v. Bisht Electronics that tribunals have no discretion to reduce penalties below statutory provisions. In this context, the High Court of Madras concluded that the Tribunal was not justified in reducing the penalties under Section 114A of the Customs Act. 7. The Court held that the specific mandate of Section 114A, requiring penalties equal to the duty or interest determined, cannot be disregarded by the Tribunal. As a result, the penalties imposed under Section 114A were reinstated for M/s. KRM International Ltd. and M/s. Dhandapani Exports Ltd., while the appeal related to Aisha International was dismissed. 8. The Court did not address a plea regarding the imposition of penalties under Section 112a of the Customs Act, as it was not the subject of the appeal. The final order set aside the Tribunal's decision to reduce penalties and reinstated the original penalties for two of the importers, while dismissing the appeal related to Aisha International.
|
