2019 (2) TMI 776 - AT - Customs

Penalty u/s 112 (a) of the Customs Act, 1962 - it was alleged that goods examined by them were not exported to Bangladesh & they were liable to penalty for negligence - appellants argued that a notice is required to be given to the officers within time specified under Section 155 (2) of the Customs Act, 1962 and that no such notice was issued to the appellants - Held that - It is observed from the Order-in-Original dated passed by the adjudicating authority that this point was specifically taken by the appellant before the adjudicating authority but Adjudicating Authority has not given any findings on this issue - also, there is nothing on record that provisions of Section 155 (2) of the Customs Act, 1962 were complied with before initiating action against the appellants. Penalty not sustainable - appeal allowed.

Summary

Issues:
1. Imposition of penalties under Section 112(a) of the Customs Act, 1962.
2. Compliance with Section 155(2) of the Customs Act, 1962 for issuing notices to officers.
3. Applicability of protection under Section 155 of the Customs Act to adjudication proceedings.

Analysis:
1. The appeals were filed against a common Order-in-Original imposing penalties on the appellants under Section 112(a) of the Customs Act, 1962. The appellants, who were customs officers, argued that the goods examined by them were not exported to Bangladesh, and they were penalized for negligence without proper notice as per Section 155(2) of the Act. The Revenue contended that the goods never crossed the border, and it was the appellants' duty to ensure the same. The issue revolved around the correctness of penalty imposition under Section 112(a).

2. The appellants argued that a notice should have been issued to them within the specified time under Section 155(2) of the Customs Act, 1962. The CESTAT Bangalore's view in a similar case emphasized the importance of adhering to the time limit for initiating proceedings. The Tribunal held that the protection under Section 155 of the Act applies to adjudication proceedings as well. Since there was no compliance with Section 155(2) in the present case, the appeals were allowed based on the non-compliance with the procedural requirement.

3. The judgment highlighted the significance of Section 155 of the Customs Act in providing protection to officers against legal proceedings. The Tribunal reiterated that the time limit prescribed under Section 155(2) must be adhered to for initiating any proceedings. The decision in various cases supported the legal correctness of dropping proceedings based on the limitation prescribed in Section 155(2). As the proceedings against the appellants were not initiated in compliance with Section 155(2), the appeals were allowed solely on this ground.

In another set of appeals, the appellants failed to appear despite notices, leading to the dismissal of the appeals for non-prosecution. The judgment emphasized the importance of vigilance in legal matters. The operative part of the order was pronounced in an open court, finalizing the decision on the appeals.