2007 (10) TMI 65 - AT - Customs

If any person acquires confiscable goods penalty not exceeding the duty sought to be evaded on such goods or Rs. 5000 whichever is greater is imposable Under Section 112(b)(ii) Custom Act penalty could not have been less than Rs. 5000 so impugned order of imposing penalty Rs. 2000 is set aside

Summary

Issues:
1. Imposition of penalty under Section 112(b)(ii) of the Customs Act, 1962.
2. Minimum prescribed penalty amount under Section 112(b)(ii) of the Act.

Analysis:
1. The respondent was found carrying goods of foreign origin without proper documentation, leading to the imposition of a penalty of Rs.2000 under Section 112(b)(ii) of the Customs Act, 1962. The adjudicating authority held the goods were illicitly imported and liable to confiscation under Section 111(d) of the Act. The Commissioner (Appeals) upheld the penalty imposed by the adjudicating authority. The Revenue challenged this order, arguing that the penalty imposed was lower than the prescribed minimum of Rs.5000 under Section 112(b)(ii) of the Act.

2. The Revenue relied on previous tribunal decisions to support their argument regarding the minimum prescribed penalty amount. Referring to the case of Bharat Petroleum Corporation Vs. CCE, Cochin, it was highlighted that the minimum penalty prescribed under rule 173Q(1) was Rs.5000. Additionally, the decision in CCE, Lucknow Vs. Sarjoo Sahakari Chini Mills Ltd. was cited, which emphasized that the penalty should not be less than Rs.5000 as per rule 173Q. Applying the same reasoning to Section 112(b)(ii) of the Customs Act, 1962, the tribunal concluded that the penalty imposed on the respondent should not be lower than Rs.5000 as it is the minimum penalty required under the provision.

3. Therefore, the tribunal set aside the previous order and imposed a penalty of Rs.5000 on the respondent under Section 112(b)(ii) of the Customs Act, 1962. The decision was based on the interpretation that the minimum penalty prescribed by law should be adhered to in such cases. The appeal by the Revenue was allowed, and the penalty amount was increased to comply with the statutory minimum requirement.