2017 (9) TMI 1569 - AT - Customs

Penalty u/s 114A of the Customs Act, 1962 - non-payment of service tax - the appellant sold the SKO other than PDS, due to utmost emergency to Govt. organization - Held that - It is a well settled law that in the matter of imposition of penalty, the conduct and/or attending extenuating circumstances are material and relevant - In the present case, the appellant had not disputed the payment of duty which they have paid upon notice. The conduct of the appellant could not show to invoke the ingredients as mentioned u/s 114A of the CA, 1962 - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Imposition of penalty under Section 112 (a) of the Customs Act, 1962 and 114A of the Act.

The appellant appealed against the penalty imposed for selling imported SKO to entities other than intended under a Customs exemption Notification. The appellant, a canalizing agency, supplied the material to another entity, which sold it in violation of the exemption. The appellant paid the differential duty upon notification by the supplier. The Commissioner confirmed the duty demand and imposed penalties on both the supplier and the appellant. The appellant argued the sale was due to an emergency to government organizations like Indian Railways/Defence. The appellant cited relevant case laws to support their case. The Revenue reiterated the Adjudicating Authority's findings. The Tribunal noted the emergency nature of the sales to government organizations and the duty payment upon notification. Section 114A of the Customs Act provides for penalties in cases of non-payment due to collusion or wilful misstatement. The Tribunal found no evidence of such conduct by the appellant. The appellant's cooperation and immediate duty payment were considered in setting aside the penalty, with a caution for future diligence.

In conclusion, the Tribunal set aside the penalty imposed on the appellant, allowing their appeal.