2018 (7) TMI 1015 - AT - Customs

Imposition of penalty u/s 114AA of the Customs Act, 1962 - penalty imposed is challenged on the ground that that under section 114AA of the Customs Act, 1962 penalty can be imposed only on cases related to export of goods and not on import of goods - Held that - Section 114AA nowhere suggests that penalty is imposable only in cases of export of goods and not on import of goods. Since, there is no explicit mention in this regard the section 114AA shall apply to all the cases irrespective whether it is related to import or export. The penalties under section 114AA on Shri Vimal Shah and Shri Anmol Sethi was not imposed only on the ground of report of standing committee on finance but also on the ground that a separate penalty cannot be imposed on the proprietors when penalty on the proprietorship concern has been imposed - It is a settled law that a separate penalty cannot be imposed on the proprietor when the penalty on proprietorship firm has been imposed. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Imposition of penalty under section 114AA of the Customs Act, 1962 on specific respondents.
2. Applicability of penalty under section 114AA in cases of import versus export of goods.
3. Challenge against the penalty imposed under section 112(a)(i) and section 114AA in the show cause notice.
4. Propriety of imposing separate penalties on sole proprietorship firms and their proprietors.

Analysis:

1. The Revenue filed an appeal against M/s Raj Traders, M/s Ideal Impex, and specific individuals seeking the imposition of penalties under section 114AA of the Customs Act, 1962. The appeal was based on the contention that the penalties were not imposed by the Ld. Commissioner, citing the intention behind section 114AA, as per a standing committee report. The Revenue argued that penalties should be imposed despite the absence of an explicit provision restricting penalties to export cases only.

2. The Tribunal analyzed the provisions of section 114AA and found no indication that penalties were limited to export cases. The Tribunal disagreed with the Ld. Commissioner's decision not to impose penalties based on the standing committee report. Additionally, the Tribunal considered previous orders where penalties were upheld for confiscation of goods, but a lenient view was taken in reducing penalties. Based on these factors, the Tribunal concluded that penalties under section 114AA apply to all cases, whether import or export.

3. The show cause notice detailed charges against the respondents, including misdeclaration and discrepancies in import consignments. The Tribunal's previous order set aside penalties under section 112(a)(i) and provided a detailed analysis of valuation issues. The Tribunal found discrepancies in valuation and misdeclaration, leading to the set aside of penalties and confiscation for certain goods. Consequently, the Tribunal determined that penalties under section 114AA were not applicable, following the same charges as those under section 112(a)(i).

4. The Ld. Commissioner refrained from imposing penalties under section 114AA on specific individuals, citing settled law that separate penalties cannot be imposed on sole proprietorship firms and their proprietors when penalties on the firms have been imposed. This finding was not challenged by the Revenue. The Tribunal upheld this principle and dismissed the Revenue's appeal, emphasizing the established legal position on separate penalties for sole proprietorship firms and their proprietors.

In conclusion, the Tribunal's judgment clarified the applicability of penalties under section 114AA, analyzed charges and penalties in the show cause notice, and affirmed the legal principle regarding penalties for sole proprietorship firms and their proprietors. The decision provided a comprehensive analysis of the issues raised in the appeal, ensuring a fair and just outcome based on the relevant legal provisions and precedents.