2019 (7) TMI 1305 - AT - Customs

Levy of penalty u/s 114AA of the Customs Act, 1962 - when admittedly no fault is found by the authority, can its report be still held to be available, if not for anything, but for levying penalty alone under Section 114AA ibid? - HELD THAT - The impugned penalty is for an express default and when the report itself has a clean slate, there cannot be any penalty, at least with respect to that report. This is also for the reason that the Commissioner (Appeals) has, in her first order, set aside the entire issue for passing fresh adjudication order in the light of the second report. The natural corollary is that the first report becomes non-est. Hence, I do not find any basis for imposition nor has the Revenue brought out any raison detre for imposition of the impugned penalty on record since the very basis i.e., the alleged fake report is itself not there on board anymore. The Adjudicating Authority has been injudicious and peremptory in imposition of the impugned penalty under Section 114AA ibid, since, unless it is proved that the person to be penalized has knowingly or intentionally implicated himself in use of false and incorrect materials, there can be no justification for penalty under this Section. This requirement of factual finding itself is not there and nor has it been answered satisfactorily either in the Show Cause Notice or in the orders of the lower authorities - impugned order set aside. Penalty deleted - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Levy of penalty under Section 114AA of the Customs Act, 1962.

Detailed Analysis:

Issue 1: Levy of Penalty under Section 114AA
- The appellant imported raw cotton which required a "No Objection" Certificate from Plant Quarantine authorities.
- Plant Quarantine Officer ordered deportation/destruction of the consignment due to a Fake Phytosanitary Certificate.
- Adjudicating Authority ordered confiscation and imposed penalties under Sections 112 and 114AA.
- First Appellate Authority remanded the case based on a subsequent certificate allowing PQ Clearance.
- Original Authority imposed a penalty of ?2,00,000 for home consumption clearance.
- Appellant appealed against penalty imposition under Section 114AA.
- Advocate argued that the appellant wasn't involved in the quality verification process.
- Advocate cited a Tribunal decision supporting their case.
- Revenue argued that the fakeness of the certificate was not disputed, justifying the penalty.
- The Tribunal analyzed Section 114AA, emphasizing the requirement of knowingly and intentionally using false information.
- Tribunal noted the burden on Revenue to establish mala fides and the culpability of the appellant.
- Lack of proof of appellant's awareness or involvement in the forbidden importation led to penalty dismissal.
- Tribunal questioned the basis for penalty imposition when the subsequent certificate cleared the consignment.
- The Tribunal found the penalty imposition unjustified without evidence of intentional wrongdoing by the appellant.
- The impugned penalty was set aside, the appeal allowed, and the penalty ordered to be deleted.

This detailed analysis covers the issues involved in the legal judgment regarding the levy of penalty under Section 114AA of the Customs Act, 1962, providing a comprehensive understanding of the case and the Tribunal's decision.