2019 (5) TMI 1421 - AT - Customs

Imposition of penalty u/s 112 of CA - Validity of SCN - HELD THAT - Ld. Commissioner has given contrary findings on the issue of penalty that in Para 47 he stated that penalty is not imposable and at the same time in Para 49 (a) and (b) he is taking a U turn stating that respondent is not liable to penalty under Section 112 of the Customs Act. Therefore, there is clear error in the order-in-original in so far as the Commissioner did not impose penalty on both the appellants. As per findings of the Commissioner, he concluded that recovery of interest under section 28AB of the Customs Act, 1962 is not warranted in this case. However, despite giving this finding, he has not passed any order in Para 50 in respect of proposal for demand of interest made in the show cause notice. It is incumbent on the Commissioner to pass an order on each and every proposal made in the show cause notice and he cannot be silent in the operating portion of the order on any of the proposal made in the show cause notice. Therefore, on this count also, there is a clear error in the order. Since there are contrary findings on imposition of penalty under Section 112 and there is error inasmuch as no order was passed on the interest, the matter needs to be remanded for passing a fresh order only on the issue of penalty under Section 112 of the Customs Act and on the interest under Section 28AB - appeal allowed by way of remand.

Summary

Issues: Appeal against non-imposition of penalty under Section 112 of Customs Act, 1962 and interest not demanded by the Commissioner.

Analysis:
1. Imposition of Penalty:
The Revenue filed appeals challenging the Adjudicating Authority's decision not to impose penalties despite acknowledging the appellants' liability under Section 112 of the Customs Act, 1962. The Commissioner's order was found to be contradictory as it stated in Para 47 that penalties are not imposable when duty has been paid before the issuance of the Show Cause Notice. However, in Para 49 (a) and (b), the Commissioner held the appellants liable for penalty due to illicit removal and sale of goods without payment of customs duty. The Commissioner's failure to impose penalties on the appellants was deemed erroneous, leading to a remand for a fresh order specifically on the issue of penalty under Section 112.

2. Interest Demand:
Regarding the proposal for demanding interest made in the show cause notice, the Commissioner's order lacked a specific decision despite findings in Para 48 stating that recovery of interest under Section 28AB of the Customs Act, 1962 was unwarranted due to timely duty payment. The absence of an order on the interest proposal in Para 50 was considered an error, emphasizing the requirement for the Commissioner to address all proposals in the show cause notice. Consequently, the matter was remanded for a fresh order solely focusing on the interest issue under Section 28AB.

In conclusion, the appellate tribunal allowed the appeals filed by Revenue, directing a remand to the Adjudicating Authority for a new order exclusively addressing the penalty under Section 112 of the Customs Act and the interest under Section 28AB. The judgment highlighted the necessity for consistency in findings and the importance of addressing all proposals in the show cause notice to ensure a comprehensive and legally sound decision-making process.