2019 (8) TMI 720 - AT - Customs

Imposition of penalties - Improper importation of goods - clearance of goods ex-bond with the benefit of concessional rate of duty - HELD THAT - In the original adjudication proceedings, penalty of ₹5,00,000 was imposed on the second respondent herein and it was on his appeal that the matter was remanded back to the original authority. If at all, any penalty that could be imposed by the original authority in fresh proceedings would have to be limited by this ceiling - In terms of the instructions issued by Government of India on litigation to be initiated by Revenue, penalty that could have been imposed is well below the threshold prescribed therein. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Imposition of penalty on the respondents by Commissioner of Customs & Central Excise.
2. Delay in filing the appeal and application for condonation.
3. Application of Section 112(b) of Customs Act, 1962 for penalty imposition.
4. Liability of company/firm for penalty under Section 112.
5. Monetary limit for filing appeals by Revenue.

Issue 1: Imposition of Penalty
The appeals were against the order imposing a penalty on the Director of the respondent-company while dropping the proposals to impose penalties on other respondents. The penalties were imposed due to failure to comply with conditions for clearance of imported goods, leading to demand of differential duty, confiscation of goods, and various penalties.

Issue 2: Delay in Filing Appeal
There was a delay of 2650 days in filing the appeal, with the application for condonation not justifying the delay. The appeal was initially filed only against one respondent, and the appeal against the other respondent was filed later. The delay was attributed to staff shortage and oversight in naming only one respondent in the appeal.

Issue 3: Application of Section 112(b) of Customs Act
Penalties were imposed under Section 112(b) of the Customs Act, 1962, which pertains to improper importation of goods. The contention was that the respondents were involved in activities falling under this section, leading to liability for penalties.

Issue 4: Liability of Company/Firm for Penalty
The argument was made that the company/firm is not liable for penalty under Section 112, which is applicable only to natural persons. Precedents were cited to support this argument, emphasizing that penalties under this section cannot be imposed on a corporate entity.

Issue 5: Monetary Limit for Filing Appeals
The appeals were contested based on the monetary limit set by the Central Board of Excise & Customs for filing appeals by Revenue. The contention was that the penalties imposed were below this threshold, and as per the litigation policy, appeals for amounts less than the prescribed limit should not be pursued.

In conclusion, the Tribunal dismissed the appeals of Revenue, citing various reasons such as the lack of merit in the appeals, the application of legal principles regarding penalties, and the adherence to monetary limits set for filing appeals. The judgment highlighted issues related to penalty imposition, delay in filing appeals, interpretation of legal provisions, and the liability of entities for penalties under specific sections of the Customs Act, 1962.