2009 (1) TMI 100 - HC - Customs

Penalty imposed on an employee in a firm on ground that certain goods which were found in a vehicle were liable to be confiscated - Tribunal deleted the penalty holding that the respondent had no knowledge and hence provisions of Section 112(b) of the Customs Act are not attracted - no material produced by revenue on record to suggest the contrary - Tribunal is right in deleting the penalty

Summary

Issues:
1. Interpretation of Section 112(b) of the Customs Act, 1962 regarding penalty imposition on employees of a firm.
2. Whether the Tribunal was justified in setting aside the penalty on an employee due to lack of knowledge of the provisions of law.
3. Legal infirmity in the impugned order of the Tribunal.

Analysis:

Issue 1: The case involved the interpretation of Section 112(b) of the Customs Act, 1962, concerning the imposition of penalties on employees of a firm. The appellant sought to question whether the Tribunal was correct in setting aside the penalty imposed on the employees under this section.

Issue 2: The respondent, an employee of a company, was penalized under Section 112(b) of the Customs Act due to certain goods found in a vehicle associated with the firm. The Tribunal, however, overturned the penalty, citing the lack of knowledge on the part of the employee regarding the confiscated goods. The Tribunal's decision was based on the employee's lack of awareness, which rendered Section 112(b) inapplicable.

Issue 3: The High Court analyzed the Tribunal's decision and found that the amended question raised by the appellant did not align with the facts of the case. The Court noted that the penalty was never imposed under Section 112(a) as originally proposed. Furthermore, the Court emphasized that Section 112(b) allows for penalties on individuals with knowledge or reason to believe that goods are liable for confiscation. Since the respondent, as an employee, lacked such knowledge, the provision did not apply. The Court found no legal infirmity in the Tribunal's decision to delete the penalty based on the employee's lack of awareness, leading to the dismissal of the appeal.

In conclusion, the High Court upheld the Tribunal's decision to set aside the penalty imposed on the employee under Section 112(b) of the Customs Act, 1962, due to the employee's lack of knowledge regarding the confiscated goods. The Court found no grounds for interference, as there was no legal infirmity in the Tribunal's order.