2019 (2) TMI 1185 - AT - Customs

Penalty u/s 114 of CA - whether there was proposal made in the show-cause notice for imposition of penalty under Section 114? - Held that - The proposals made against the respondents as reproduced in Order-in-Original clearly shows that there was no proposal made for penalty under Section 114. Since no penalty was proposed under Section 114, Commissioner could not have imposed penalty under that Section. The Commissioner has imposed penalty of ₹ 70,00,000/- on the respondents under Section 114AA - Since penalty has already been imposed under Section 114AA, there is no merit in proposed penalty under Section 114 at this stage - Since appeal filed by the Revenue travels beyond the scope of show-cause notice and the adjudication order, the same is not maintainable and hence, dismissed.

Summary

Issues:
- Imposition of penalty under Section 114 of the Customs Act, 1962 without a proposal in the show-cause notice.

Analysis:
The appellate tribunal heard arguments from the Revenue represented by Dr. J. Harish, AR, who contended that since the Commissioner had held the goods liable for confiscation under Section 113, a penalty under Section 114 should have been imposed. However, it was noted that the Commissioner did not impose any penalty under Section 114 in the original order. The tribunal observed that the show-cause notice did not include a proposal for penalty under Section 114, as the charges against the respondents were specific to confiscation of goods, denial of duty drawback, and imposition of penalty under Section 114AA. The absence of a proposal for penalty under Section 114 in the show-cause notice led the tribunal to conclude that the Commissioner could not have imposed such a penalty.

During the appeal, the Revenue failed to provide any grounds substantiating the imposition of penalty under Section 114. The grounds of appeal merely highlighted the absence of penalty imposition by the Commissioner under Section 114, without presenting any specific arguments in support. The tribunal noted that the Commissioner had indeed imposed a penalty of &8377; 70,00,000 under Section 114AA, which rendered the proposed penalty under Section 114 redundant. As a result, the tribunal found no merit in pursuing the penalty under Section 114 at that stage.

Ultimately, the tribunal dismissed the appeal filed by the Revenue, stating that it extended beyond the scope of the show-cause notice and the original adjudication order. The decision was based on the lack of a proposal for penalty under Section 114 in the show-cause notice and the subsequent imposition of a penalty under Section 114AA by the Commissioner. The tribunal's ruling emphasized the importance of adherence to procedural requirements and the necessity for penalties to be appropriately supported by the contents of the show-cause notice.