2016 (10) TMI 128 - AT - Customs

Quantification of penalty imposed under Section 114A of Customs Act, 1962 - whether penalty imposed should be equal to the duty determined plus interest so determined? - Held that - The Commissioner was not in a position to determine the interest amount at the time of passing the impugned order. Therefore, his imposing penalties equal to the duty determined is in order. - the decision in the case of Bharathi Airtel Ltd. & Others Vs. C.C., Bangalore 2012 (7) TMI 233 - CESTAT, BANGALORE relied upon - penalty under Section 114A should be equal to the duty or the interest so determined - appeal rejected - decided against Revenue.

Summary

Issues:
- Whether penalty under Section 114A of Customs Act should be equal to duty determined plus interest as contended by the appellants.

Analysis:
The judgment pertains to two appeals filed by the Revenue challenging the Order-in-Appeal passed by the Commissioner of Customs (Appeals). The main issue in consideration was the quantum of penalty under Section 114A of the Customs Act, 1962. The appellants argued that the penalty should be equal to the duty determined plus interest. However, the learned adjudicating authority had imposed penalties equal to the differential duty determined in the impugned order. Section 114A allows for the levy of penalty equal to the duty or interest payable in cases involving collusion, willful misstatement, or suppression of facts.

The learned Commissioner (Appeals) analyzed Section 114A and concluded that the penalty should indeed be equal to the duty or interest determined. This decision was supported by a Tribunal ruling in the case of Bharathi Airtel Ltd. & Others Vs. C.C., Bangalore. The Tribunal in that case highlighted that the interest payable depends not only on the duty determined but also on the actual date of payment, making it difficult to ascertain the exact interest amount at the time of adjudication. Therefore, imposing penalties equal to the duty determined was deemed appropriate.

Additionally, the Tribunal in the case of Commissioner of C. Ex., Cus. & S.T., Bangalore-I Vs. B. Suresh Vasudev Baliga dismissed appeals filed by the Revenue on the same issue, following the precedent set by the Bharathi Airtel Ltd. case. Based on the consistent rulings of the Tribunal, the judge in this case found no merit in the Revenue's appeals and consequently dismissed both appeals.

In conclusion, the judgment clarifies the application of Section 114A of the Customs Act regarding the quantum of penalty in cases involving duty determination and interest payment. The decision aligns with previous Tribunal rulings and establishes a precedent for determining penalties in such scenarios.