2018 (9) TMI 1777 - HC - Customs

Reduction of penalty u/s 112 (a) of Customs Act - it was contended that penalty was reduced without assigning any reason - smuggling of Iridium metal - Held that - The impugned order of the Tribunal, reduced the penalty by holding that smuggling has been proved only by way of circumstantial evidence and in the absence of interrogating the kingpin i.e. Mr. Kanwalpreet Singh. Thus, it was of the view that penalty as imposed of ₹ 20 lakhs under Section 112(a) of the Act, is on the higher side. It is not the case where no reasons has been assigned for reduction of penalty. The view taken by the Tribunal in the facts of the present case, is a possible view and does not give rise to any substantial question of law - Appeal disposed off.

Summary

Issues:
Reduction of penalty under Section 112(a) of the Customs Act 1962 without interrogating the kingpin of the smuggling activity.

Analysis:
The High Court of Bombay heard an appeal challenging a common order passed by the Central Excise and Service Tax Appellate Tribunal related to a reduction of penalty on the Respondent from ?20 lakhs to ?2 lakhs under Section 112(a) of the Customs Act 1962. The main contention raised by the Revenue was whether the Tribunal was justified in reducing the penalty without assigning any reason, especially when the smuggling of 'Iridium metal' had been proven by the Department. The impugned order of the Tribunal acknowledged the involvement of the Respondent in the smuggling activity but reduced the penalty based on the fact that the smuggling was proven only through circumstantial evidence and the kingpin of the operation was not interrogated by the Revenue. The Tribunal held that the penalty of ?20 lakhs was on the higher side given the circumstances. The High Court noted that the Tribunal's decision was based on the view that smuggling was established through circumstantial evidence and the absence of interrogation of the kingpin. The Court concluded that the Tribunal's decision was a possible view in the case and did not give rise to any substantial question of law, leading to the dismissal of the appeal.

In summary, the High Court upheld the Tribunal's decision to reduce the penalty on the Respondent under Section 112(a) of the Customs Act 1962 from ?20 lakhs to ?2 lakhs. The Court found that the reduction was based on the fact that smuggling was proven through circumstantial evidence and the kingpin of the operation was not interrogated by the Revenue. As a result, the Court concluded that the Tribunal's decision was reasonable and did not warrant any further legal intervention, ultimately disposing of the appeal without any costs.