2017 (3) TMI 161 - HC - Customs

Imposition of penalty in de novo adjudication - originally when the order was passed on 30.05.2000, the third respondent has not imposed any penalty. Subsequently, the appellate authority has remitted the matter by order dated 17.05.2002 for de novo adjudication. In the de novo proceedings, penalty was imposed by the second respondent. The matter was remitted only for the purpose of de novo adjudication, in such facts of the case, whether the imposition of penalty justified? - Held that - reliance was placed in the case of M/s.The Mehta Fine Arts vs. The Customs, Excise and Service Tax Appellate Tribunal 2015 (9) TMI 975 - MADRAS HIGH COURT , where it was held that There is no bar on the adjudicating authority, in a de-novo proceedings, to determine the quantum of fine or penalty. The fine and penalty imposed has been set aside and the matter is live for re- adjudication. Hence earlier order imposing fine or penalty does not have any relevance - appeal dismissed - decided against appellant.

Summary

Issues:
1. Appeal against Final Order No.189/12 dated 05.03.2012 in A.No.C/468/2004.
2. Confiscation of second-hand printing machines under Customs Act, 1962 and EXIM Policy.
3. Remand for de novo adjudication and imposition of penalty under Section 112(a) of the Customs Act, 1962.
4. Legality of penalty imposition in de novo proceedings.

Analysis:
1. The appeal was filed against Final Order No.189/12 dated 05.03.2012 in A.No.C/468/2004, concerning the confiscation of second-hand printing machines imported by a partnership firm. The machines were found to have been sold in violation of the Customs Act, 1962 and the EXIM Policy, leading to a show cause notice and subsequent adjudication resulting in confiscation and a penalty under Section 125 of the Customs Act, 1962.

2. The case involved the remand for de novo adjudication after an initial order and subsequent imposition of a penalty under Section 112(a) of the Customs Act, 1962. The appellant contested the penalty imposition, arguing that the original order did not include a penalty, and the remand order did not authorize the imposition of a penalty in the de novo proceedings. The appellant sought to set aside the penalty imposed in the de novo adjudication.

3. The legal contention revolved around the legality of imposing a penalty in de novo proceedings. The appellant argued that since the original order did not include a penalty and the remand was for de novo adjudication, the penalty imposed in the de novo proceedings was not legally sustainable. However, the respondents relied on a previous unreported judgment stating that there is no bar on the adjudicating authority to determine the quantum of fine or penalty in de novo proceedings, even if no penalty was initially imposed.

4. The Court, after considering the arguments from both sides, referred to the unreported judgment mentioned by the respondents. The Court held that in de novo proceedings, the adjudicating authority has the discretion to impose an appropriate fine or penalty, regardless of whether a penalty was initially imposed. The Court concluded that the earlier order imposing a penalty did not have relevance in the de novo proceedings and upheld the imposition of the penalty in this case. Consequently, the Court dismissed the Civil Miscellaneous Appeal based on the precedent cited and ruled in favor of the Revenue without costs.