2017 (2) TMI 52 - HC - Customs

Maintainability of appeal - imposition of penalty on appellant and exporter - appeal dismissed on the pecuniary jurisdiction on the ground that penalty is only for a small amount of ₹ 25,000/- - Held that - when payment of penalty has a bearing on the renewal of licence, the second respondent ought to have entertained the appeal and disposed it of on merits - the matter is remitted to the second respondent for fresh consideration. The second respondent is directed to entertain the appeal and dispose of the same on merits and in accordance with law - appeal restored - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Incorrect rate of drawback mentioned in shipping bill.
2. Show cause notice issued under Section 114AA of the Customs Act, 1962.
3. Imposition of penalty on the exporter and the appellant.
4. Appeal filed before the Commissioner of Customs (Appeals).
5. Reduction of penalty by the Commissioner of Customs (Appeals).
6. Dismissal of the appeal by the second respondent on pecuniary jurisdiction.
7. Interpretation of the second proviso to Section 129A(1) of the Customs Act, 1962.

Analysis:

1. The appellant filed shipping bills for exporting various types of paper, mentioning incorrect drawback rates. The mistake was noticed by the exporters, and the excess amount was remitted to the department along with interest.

2. The Assistant Commissioner of Customs issued a show cause notice under Section 114AA of the Customs Act, 1962, treating the error as an offence. The notice demanded payment and proposed penalties on both the exporters and the appellant.

3. The Additional Commissioner imposed penalties on the exporter and the appellant, which were later reduced by the Commissioner of Customs (Appeals). The appellant then appealed to the second respondent against the reduced penalty.

4. The second respondent dismissed the appeal citing pecuniary jurisdiction, stating that the appeal involved a small amount of penalty. The appellant challenged this dismissal, arguing that the penalty amount could affect the renewal of their license.

5. The appellant contended that despite the policy not to seek appeal remedy for amounts below a certain threshold, the appeal should not have been summarily dismissed. The respondents, however, supported the dismissal in line with the second proviso to Section 129A(1) of the Customs Act, 1962.

6. The High Court held that considering the impact of the penalty on the license renewal, the second respondent should have entertained the appeal and decided on its merits. The court set aside the order and remitted the matter to the second respondent for fresh consideration.

7. The High Court allowed the appeal, directing the second respondent to entertain and decide on the appeal based on its merits and in accordance with the law. The court concluded by stating that no costs were to be awarded, and the connected miscellaneous petition was closed.