2015 (10) TMI 2087 - HC - Customs

Waiver of penalty imposed on deceased husband - Mis-declaration of imports - Revenue could not show any provision by which the amount of penalty could have been recovered and from the wife of deceased - Held That - Communications addressed to petitioner are not legally tenable - Section 147 would not enable the Respondents to recover the penalty; no other section brought to notice of the Court - Penalty cannot be recovered from the petitioner; communications are quashed and set aside - Decided in favour of Petitioner.

Summary

Issues:
Recovery of penalty from the widow of a deceased individual under the Customs Act, 1962.

Analysis:
1. The petitioner, who is the widow and legal heir of the deceased, challenged the penalty recovery proceedings initiated against her deceased husband by the Customs Authority. The orders imposing penalties were dated 25th October, 2007, and 18th November, 2010. The petitioner's husband passed away in 2008, and the Customs Authority sought to recover the penalty from the widow through various communications.

2. The case involved misdeclaration of imports by the deceased, leading to liabilities under the Customs Act, 1962. While a significant amount had already been recovered, the outstanding issue was the recovery of the penalty amount. The deceased was considered the key person in the irregular import and the primary beneficiary of the business involving smuggled goods.

3. The Court noted that there was no provision in the Customs Act, 1962 that explicitly allowed the recovery of penalties from the heirs of a deceased individual. Despite the penalties imposed on the deceased for violations of the Act, there was no legal basis shown for recovering the penalty amount from his widow. The Court emphasized that the act of import was attributed to the importer, not his heirs, and the provisions of the Act did not support recovering penalties from the deceased's family members.

4. Consequently, the Court found the communications addressed to the petitioner (widow) to be legally untenable. It was observed that the Customs Act, 1962, specifically Section 147, did not empower the authorities to recover penalties from the deceased's wife. The Court highlighted the lack of any other relevant provision enabling such recovery in the given circumstances.

5. The Court ruled in favor of the petitioner, stating that the penalty amount could not be recovered from her. The impugned communications were quashed and set aside. However, the Court clarified that its decision did not affect the recovery of other dues to the government or any appeals related to the deceased's liabilities. The order was limited to the recovery of penalties from the deceased's wife, allowing other recovery actions to proceed in accordance with the law. The Court disposed of the petition without costs, keeping all contentions open for both parties regarding the recovery of duty amounts related to the deceased's liabilities.