2019 (10) TMI 182 - HC - Customs

Enhancement in the quantum of penalty - import of complete computer systems - confiscation - redemption fine - penalty - HELD THAT - The impugned order dated 26 May 2004 of the Tribunal while reducing the penalty upon the Respondents records the fact even according to the Revenue the mastermind of the conspiracy to import computer was M/s. Crompton Greaves Limited. This as the contract between M/s. Packard Bell Limited and M/s. Crompton Greaves Limited was negotiated and finalised before the Respondent came into the picture. Therefore the impugned order in the overall facts and circumstances of the case reduced the penalty from ₹ 5 lakhs to ₹ 2.50 lakhs. In these facts the view taken by the Tribunal is a very possible view and cannot be said to be perverse. The question as proposed does not give rise to any substantial question of law. Thus not entertained - appeal dismissed.

Summary

Issues involved:
Challenge to Tribunal's order under Section 130 of the Customs Act, 1962 regarding penalty enhancement for Advance Technology Devices.

Analysis:
The appeal before the High Court challenged the Customs Excise and Service Tax Tribunal's order dated 26 May 2004. The appeal was filed by the Revenue against four respondents, but it was restricted to Advance Technology Devices, with the appeals against the other three respondents withdrawn due to tax effect considerations. The main question of law raised was whether the Tribunal was correct in allowing the appeal of the respondents and dismissing the appeal of the Revenue for enhancing the penalty amount. The Tribunal's order dated 1 August 1995 had initially confiscated 107 computer systems imported by the respondent under a Bill of Entry, with a redemption fine and total duty liability imposed. The respondent's appeal sought to set aside the confiscation, redemption fine, and penalties, while the Revenue's appeal aimed at enhancing the penalty.

The Tribunal's impugned order disposed of both appeals and considered the submissions of both parties. The Tribunal acknowledged that the imported items were complete computer systems, and the respondent sought leniency in the quantum of fine and penalty, while the Revenue sought enhancement of the penalty. After considering the facts and circumstances, the Tribunal decided not to interfere with the confiscation and redemption fine but reduced the penalty under Section 112 of the Act from ?5,00,000 to ?2,50,000. The Tribunal noted that the mastermind behind the conspiracy to import computers was another entity, not the respondent, which influenced the penalty reduction decision. The High Court found the Tribunal's decision reasonable and not perverse, leading to the conclusion that the proposed question did not raise any substantial legal issue.

The High Court further mentioned that the examination of the 2004 order was due to the appeal being put up for consideration after a delay was condoned in April 2019. Ultimately, the appeal was disposed of with no order as to costs.