2018 (9) TMI 511 - AT - Customs

Quantum of Penalty u/s 112 (a) read with 114 (AA) of the Customs Act, 1962 - Held that - In this case for a duty of ₹ 57 lakhs, penalty of ₹ 3.2 Crs imposed on the appellant is not justified - matter remanded back to the Adjudicating Authority for fresh adjudication to find out whether the penalty is imposable upon the appellant and if yes, then what should be the quantum of the penalty - appeal allowed by way of remand.

Summary

Issues: Imposition of penalty under Section 112 (a) read with 114 (AA) of the Customs Act, 1962.

Analysis:
1. The appellant appealed against a penalty of ?3.2 Crs imposed on them under Section 112 (a) read with 114 (AA) of the Customs Act, 1962. The appellant's counsel referred to a similar case where a penalty of ?1 Crs was imposed for a duty of ?57 lakhs, and the High Court remanded the matter back for fresh adjudication due to the excessive penalty. The appellant requested a similar remand in their case.

2. The Tribunal, considering the High Court's decision in the mentioned case, held that imposing a penalty of ?3.2 Crs for a duty of ?57 lakhs on the appellant was unjustified. Therefore, the Tribunal set aside the order imposing the penalty and remanded the matter to the Adjudicating Authority for fresh adjudication to determine if a penalty should be imposed on the appellant and, if so, the appropriate quantum of the penalty.

3. The Tribunal remanded the matter back to the Adjudicating Authority for a detailed examination of the issue on merits in accordance with the law. Consequently, the appeal was disposed of, and the decision was dictated and pronounced in the open court.

This judgment highlights the importance of proportionality in imposing penalties under the Customs Act, ensuring that penalties are commensurate with the duty involved. The Tribunal's decision to remand the matter for fresh adjudication emphasizes the need for fairness and adherence to legal principles in penalty imposition cases.