2017 (1) TMI 869 - AT - Customs

Imposition of penalty on officers who are inspector and superintendent and importer - absolute confiscation of Lead Scrap, prohibited and restricted item - it is alleged that officers failed to perform their duties and importer imported prohibited item - Held that - the Original Authority has held that there is no evidence on record to justifying penalty under Section 112 and that the Officers have neither connived nor indulged in the fraudulent act and that the charges, made out against them, are not explicit and the only ground made out is that they ought to have examined the containers fully and discovered discrepancies - He further held that since the SCN proposed imposition of penalty under Section 112 of Customs Act, 1962 against the two Officers, the provisions of Section 117 of Customs Act, 1962 were not invokable - penalty on officers set aside. The penal provisions, u/s 117 of Customs Act, 1962, is residuary in nature and can be invoked only in the situation when no express penalty is provided, elsewhere in the Customs Act Penalty on importer is held to be justified. Appeal dismissed - decided partly in favor of revenue.

Summary

Issues: Appeal against Order-in-Original for penalty imposition and confiscation of goods.

Issue 1: Imposition of penalty on individuals and enhancement of penalty on the entity.
The appeal was filed by the Revenue against Order-in-Original No.13/Commissioner/GZB/CUS/2012-13 seeking to impose penalties on specific individuals and enhance the penalty imposed on M/s Ruby Impex. The Original Authority had ordered absolute confiscation of various items and imposed a penalty of &8377; 25 lakh on M/s Ruby Impex. The grounds of appeal included the failure of the Inspector and Superintendent to examine the goods properly and the importation of restricted items by M/s Ruby Impex.

Issue 2: Examination of evidence and legal provisions for penalty imposition.
The Tribunal carefully examined the findings of the Original Authority, which stated that there was no evidence to justify penalties under Section 112 of the Customs Act against the individuals. The Original Authority concluded that the officers did not connive or engage in fraudulent acts, and the charges against them were not explicit. It was noted that the penal provisions under Section 117 of the Customs Act could only be invoked when no express penalty was provided elsewhere in the Act. Since the show-cause notice proposed penalties under Section 112, Section 117 was deemed inapplicable. Consequently, the Tribunal found the findings of the Original Authority to be valid and rejected the appeal to impose penalties on the individuals and upheld the penalty imposed on M/s Ruby Impex.

Issue 3: Tribunal's decision and dismissal of the Revenue's appeal.
After considering the contentions and reviewing the Original Authority's findings, the Tribunal dismissed the Revenue's appeal. The Tribunal found no grounds to interfere with the penalty imposed on M/s Ruby Impex and upheld the decision to not impose penalties on the Inspector and Superintendent. Therefore, the appeal filed by the Revenue was rejected, and the decision was pronounced in the open court.