2016 (8) TMI 28 - AT - Customs

Levy of penalty - use of IEC code of others for import of goods - It was contended that once the goods have suffered duty and interest and penalty has been paid, this appellant should not suffer another penalty of ₹ 2,00,000/- imposed under section 112 (a) of the Customs Act, 1962. - Held that - Revenue is correct to say that there were two different offences committed by two different persons. While Shri M. Gouri Shanker was lender of IEC code and Shri K. Harish Gandhi, present appellant was an abuser thereof, penalty under two different provisions of law is leviable. Law is well settled that any leniency to the breach of law and in subject like Customs shall perpetuate fraud and that shall be a bonus to evaders. - Decided against the appellant.

Issues:
1. Whether the appellant should be penalized under section 112(a) of the Customs Act, 1962, considering the penalty already paid by another party involved in the offense.
2. Whether the appellant's actions warrant a separate penalty despite the penalty imposed on the other party.
3. Whether leniency should be granted to the appellant based on the circumstances of the case.

Analysis:
1. The appellant argued that since another party, M/s. M.G. Trading Co., and its proprietor had already paid duty, interest, and a penalty of 25% of the duty amount for importing furniture, the appellant should not be penalized again under section 112(a) of the Customs Act, 1962. The appellant contended that imposing an additional penalty of ?2,00,000 would be unjust. However, the Revenue asserted that the offenses committed by the appellant were distinct from those of M/s. M.G. Trading Co. and its proprietor. The Revenue argued that the appellant, along with another individual, had committed a separate offense, justifying the imposition of an additional penalty.

2. The tribunal examined the roles of the parties involved in the offense. It was established that the appellant had misused an Importer Exporter Code (IEC) belonging to another individual. The tribunal noted that while M/s. M.G. Trading Co.'s proprietor had lent the IEC code to a different individual, the appellant had abused it. The tribunal agreed with the Revenue's position that the offenses committed by the parties warranted separate penalties under different provisions of the law. Therefore, the tribunal upheld the decision to penalize the appellant despite the penalty already paid by the other party.

3. The tribunal emphasized the importance of upholding the law in cases involving customs violations. It highlighted that leniency towards such breaches could encourage fraudulent activities and benefit those evading duties. Consequently, the tribunal rejected the appellant's plea for leniency and upheld the decision of the adjudicating authority to impose the penalty on the appellant. The tribunal dismissed the appeal, affirming that no interference was warranted in the penalty imposed on the appellant based on the distinct offenses committed.

In conclusion, the tribunal maintained that separate penalties were justified for the appellant's actions, emphasizing the need to deter customs violations and prevent fraudulent practices. The decision underscored the significance of upholding the law in customs-related matters to prevent evasion and maintain the integrity of the regulatory framework.

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