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2014 (11) TMI 450 - HC - CustomsImposition of fine / penalty on partner as well as on firm - Year of manufacturing wrongly mentioned - Imported machineries were found to be more than ten years old warranting a licence - appellant has not taken any such licence - violation of Para 2.17 of EXIM Policy 2002-07 and Rule 11 of the Foreign Trade (Regulation) Rules, 1993 - Whether the statutory authority was justified in imposing fine on the firm as well as on the partner - Held that - Section 112(a) of the Customs Act, 1962 provides that not only the person who is instrumental in doing a particular act by violating the provisions of the Act but also the person who abets it or commits such act, is also liable for payment of penalty. The goods in question were imported in the name of the firm by name M/s. Sri Ram Tex. The appellant in C.M.A. No. 811 of 2012 in his capacity as the partner abetted the firm to commit the offence. Therefore, the statutory authority was fully justified in imposing fine on the firm as well as on the partner. No substantial question of law arises - Decided against assessee.
Issues: Imposition of fine in lieu of confiscation under Customs Act, 1962; Jurisdictional error in confirming penalty; Violation of Para 2.17 of EXIM Policy 2002-07; Import of weaving looms from Spain; Confiscation of machinery under Section 111(d) of the Customs Act; Abetment of offense by partner; Justification of imposing fine on firm and partner.
The judgment pertains to two Civil Miscellaneous Appeals challenging an order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reducing a fine imposed in lieu of confiscation to Rs. 5 lakhs. The appellant imported shuttleless sulzer projectile weaving looms from Spain, which were found to be in violation of Para 2.17 of EXIM Policy 2002-07. The Customs Department detained the looms and issued a show cause notice for confiscation and penalty imposition. The appellant contended lack of awareness due to engaging an agent for importation. The original authority confiscated the machinery and imposed fines of Rs. 7 lakhs and Rs. 2 lakhs respectively, which were upheld by the Commissioner of Customs (Appeals) and later by CESTAT. The appellant argued before the High Court that CESTAT erred in confirming the penalty under Section 112(a) of the Customs Act without considering that the penalty had already been levied on the firm, asserting the partnership's inseparability from its partners. The Court noted the discrepancy in the year of manufacture of the looms and the lack of requisite license for importation, leading to confiscation under Section 111(d) of the Customs Act. The CESTAT's conclusion of record fabrication and engraving of false manufacturing years was upheld. The central issue raised in the appeals was the justification of imposing fines on both the firm and the partner. Section 112(a) of the Customs Act holds individuals instrumental in or abetting violations liable for penalties. The firm, M/s. Sri Ram Tex, imported the goods, with the partner abetting the offense, justifying the imposition of fines on both entities. The Court found no substantial question of law to entertain under Section 113 of the Customs Act. In conclusion, the High Court dismissed both Civil Miscellaneous Appeals, upholding the imposition of fines on the firm and the partner for the violation of customs regulations. The connected Miscellaneous Petitions were closed without costs, as no substantial legal questions were found to warrant further consideration.
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