2017 (2) TMI 132 - AT - Customs

Imposition of penalty u/s 112 and 114A of the CA, 1962 - whether the penalties are sustainable on co-noticees, when the penalty on main appellant is set aside? - Held that - the case of the main appellant Smt. Sunetra Ajit Pawar has been settled by the settlement commissioner vide Final order No.115/Final-Order/Cus/RKT/2012 dated 19-10-2012. Therefore other co-noticee in the same case should not be charged with any penalty. By the settling the case of the main person, case of other co-noticee also stand settled - penalty set aside - appeal allowed - decided in favor of appellants.

Summary

Issues: Valuation of imported car, Penalty under Section 112(a) and 114A, Settlement commission's decision, Liability of co-noticee in settled case

In this case, the primary issue revolved around the valuation of an imported Toyota Land Cruiser Diesel -V, where the importer declared a value of US$ 57050, later found to be lower than the actual value of US$ 110000. The initial clearance of the car was done with a penalty imposed due to the absence of a type approval certificate. Subsequently, a show cause notice was issued for duty demand and confiscation of the car, along with penalties for the appellants. The main importer approached the settlement commission, which determined that the car was new but the value was mis-declared, resulting in the acceptance of the differential duty. The case of the present appellants was adjudicated separately, leading to penalties of &8377; 50,000 each under Section 112 and &8377; 15,000 under Section 114A.

Regarding the valuation issue, the appellants argued that they were unaware of the actual value as even the customs authorities accepted the declared value during clearance. They contended that the subsequent investigation revealed the true value, absolving them of liability under Section 112(a) and 114A. Additionally, they relied on various judgments to support their claim that since the main appellant's case was settled by the commission, co-noticees should not be penalized. The tribunal agreed with this argument, citing precedents and holding that when the main person's case is settled, the case of co-noticees is also considered settled. Therefore, no penalty could be imposed on the present appellants, and the impugned order was set aside, with the appeals allowed.