2007 (8) TMI 117 - AT - Customs

Penalty - Partner of a partnership firm provide assistance to another person in sale of mulberry silk imported duty free against advance license and he acted on his individual capacity - Penalty not imposed on partnership firm u/s 112(b) of the CA,1962

Summary

Issues:
1. Violation of provisions of the Customs Act regarding diversion of duty-free imported mulberry raw silk.
2. Adjudication of violations and penalties imposed on involved parties.
3. Appeal filed by M/s. Gokul Textiles Corporation against penalties imposed under Section 112(b) of the Customs Act.

Analysis:
1. The judgment involves investigating the diversion of duty-free imported mulberry raw silk against advance licenses, with admissions from involved parties like M/s. Aniam Niryat and M/s. Gokul Textiles Corporation. The investigation revealed the selling of imported raw silk in the market, leading to penalties and demands for exemptions availed.

2. The Commissioner of Customs imposed penalties on M/s. Aniam Niryat, M/s. Gokul Textiles Corporation, and M/s. N.R. Babu & Bros. The penalties were based on violations under the Customs Act, specifically Section 112(b), for knowingly dealing with imported raw silk. The appeal was filed by M/s. Gokul Textiles Corporation, denying allegations and claiming lack of knowledge regarding the imported material's status under the DEEC Scheme.

3. The appellate tribunal analyzed the case, noting that M/s. Gokul Textiles Corporation, as a partnership firm, was involved in assisting in the disposal of the imported raw silk. The tribunal considered the defense presented, highlighting that the penalties imposed under Section 112(b) of the Customs Act could not be applied to a firm like M/s. Gokul Textiles Corporation. As there was no finding in the impugned order holding the firm liable for the penalties, the tribunal allowed the appeal filed by M/s. Gokul Textiles Corporation, setting aside the penalty imposed on them.