2015 (2) TMI 219 - AT - Customs

Penalty u/s 117 or u/s 112 - Penalty u/s 112 dropped against assessee - Held that - In the impugned order it is found that there is a finding of the adjudicating authority that the appellant is not liable for penal action as he is not concerned with the impugned goods. It was observed by the ld. Commissioner that he had extended help to the importer in the massive evasion of duty. If he would have been careful, the duty evasion could have been avoided but he restrained to impose penalty under Sec. 112 of the Customs Act on these findings. When the ld. Commissioner has not imposed any penalty under Sec. 112 of the Customs Act, 1962 which provides that penalty can be imposed on the appellant on the allegation of aiding and abetting on the payment of duty, penalty under Sec. 117 is not leviable on the appellant. In these terms, we set aside the impugned order qua the appellant - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalty under Sec. 117 of the Customs Act, 1962 instead of Sec. 112.
2. Applicability of penalty under Sec. 117 without a specific proposal in the show cause notice.

Analysis:
1. The appellant contested the penalty imposed under Sec. 117 of the Customs Act, 1962, challenging the discrepancy as the proposal was initially made under Sec. 112. The impugned order confirmed the penalty under Sec. 117, leading to the appeal. The appellant argued that since there was no initial proposal under Sec. 117, the penalty should not be imposed under this section. The contention was that the impugned order should be set aside due to this discrepancy.

2. The Advocate for the appellant reiterated the grounds of appeal, emphasizing the incorrect imposition of penalty under Sec. 117. On the contrary, the Respondent's representative opposed this argument, stating that the misquoting of the Customs Act section does not invalidate the imposition of the penalty.

3. After hearing both sides and examining the impugned order, the Tribunal noted that the adjudicating authority found the appellant not liable for penal action regarding the impugned goods. Despite the appellant's involvement in aiding the duty evasion, the Commissioner did not impose a penalty under Sec. 112. As Sec. 117 is contingent on the imposition of penalties under Sec. 112 for aiding and abetting in duty payment, the Tribunal concluded that the penalty under Sec. 117 is not applicable in this case. Consequently, the Tribunal set aside the impugned order against the appellant, allowing the appeal with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the penalty imposed under Sec. 117 of the Customs Act, 1962, due to the absence of a proposal under this section and the Commissioner's decision not to levy penalties under Sec. 112. The judgment provided relief to the appellant based on the specific legal provisions and the adjudicating authority's findings.