2007 (10) TMI 24 - AT - Customs

Duty deposited before issuance of SCN so penalty will be 25% as per 11AC Penalty can not be set aside mere on wrong mentioning of section in SCN, which may be on account of typographical error

Summary

Issues involved:
Confirmation of demand of duty on imported polyester, imposition of personal penalties under Sections 112 and 114A of the Customs Act, typographical error in mentioning penalty sections, appellant's challenge on penalty imposition, appeal for enhancement of penalty by Revenue, interpretation of relevant legal provisions.

Analysis:

1. The case involved the confirmation of a duty demand of Rs. 5,00,225 on 15,000 kgs of imported polyester found diverted in the local market. The original Adjudicating Authority confirmed the demand, leading to the initiation of proceedings against the appellant. Personal penalties were imposed under Sections 112 and 114A of the Customs Act on the appellant and other co-noticees. The Commissioner (Appeals) upheld the duty demand but reduced the personal penalty on the appellant to Rs. 1.25 lakhs.

2. The appellant's written submissions did not dispute the duty demand but argued that the penalty was wrongly imposed under Section 114A instead of Section 112. They cited relevant case law to support their argument and requested the setting aside of the personal penalty. The appellant also contested the Revenue's appeal for enhancement of penalty, citing a Delhi High Court decision regarding the justification of a 25% penalty when duty was paid before the show cause notice.

3. The tribunal noted the typographical error in mentioning penalty sections in the order but emphasized that the show cause notice clearly proposed penalty imposition under Section 112. Referring to precedent cases, the tribunal highlighted that the substance of the allegations and the noticee's understanding were crucial, rather than the form or technical errors in mentioning legal provisions.

4. Considering the arguments presented, the tribunal rejected the appellant's plea for further reduction of the penalty, which had already been reduced to Rs. 1.25 lakhs. Additionally, the tribunal agreed with the appellant regarding the inapplicability of the Revenue's appeal for enhancement of penalty, citing the Delhi High Court's decision on the justification of a 25% penalty when duty was paid before the issuance of the show cause notice.

5. Ultimately, the tribunal rejected both appeals filed by the appellant and the Revenue, concluding that the duty demand and penalties imposed were justified based on the evidence and legal provisions cited during the proceedings.

This detailed analysis covers the issues related to duty demand, penalty imposition, legal provisions, typographical errors, case law references, and the final decision of the tribunal.