2017 (12) TMI 1385 - AT - Customs

Penalty u/s 114A of CA - SAD - N/N. 21/2012 dated 17/03/2012 - whether the Adjudicating Authority is legally correct in imposing penalty equal to the duty by invoking the provisions of Section 114A ibid, in view of the fact that the entire duty alongwith interest and 15% of the penalty amount were deposited within one month from the date of issuance of the SCN? - Held that - In view of the fact that the proceedings were concluded by the Adjudicating Authority u/s 28 (5) upon deposit of duty amount alongwith interest and 15% of penalty, there was no occasion or scope to proceed further against appellant for confirmation of penalty under Section 114A ibid - appeal allowed - decided in favor of appellant.

Summary

Issues:
Imposition of penalty under Section 114A of the Customs Act.

Analysis:
The case involved an appeal against an order passed by the Commissioner of Customs, New Delhi, regarding the denial of exemption from the special Additional duty of customs on imported Mobile Phones under Notification No. 21/2012. The appellant contended that the duty had been paid before the adjudication order was issued, invoking Section 28(5) of the Customs Act, 1962. The main issue before the Tribunal was whether the Adjudicating Authority was justified in imposing a penalty equal to the duty under Section 114A, despite the duty, interest, and 15% of the penalty amount being deposited within one month of the show cause notice.

The Tribunal noted that the appellant did not contest the duty liability but challenged the imposition of the penalty. It was observed that the Adjudicating Authority had already concluded the proceedings under Section 28(5) upon the deposit of duty, interest, and 15% of the penalty. Therefore, the Tribunal held that there was no legal basis to impose an additional penalty under Section 114A. The Tribunal emphasized that once the duty amount, interest, and a portion of the penalty were paid, the proceedings had to be closed for statistical purposes, and there was no scope for further penalties. In this case, since the amount deposited was encashed before the adjudication, no further penalty was warranted. Consequently, the Tribunal set aside the impugned order that imposed a penalty under Section 114A, ruling in favor of the appellant.

In conclusion, the Tribunal's decision centered on the correct application of penalty provisions under the Customs Act, emphasizing that once the duty, interest, and a portion of the penalty were paid before adjudication, no additional penalty could be imposed. The judgment provided clarity on the legal principles governing penalty imposition in customs cases, ensuring a fair and just outcome for the appellant in this particular matter.