2020 (3) TMI 40 - HC - Customs

Imposition of penalty u/s 114AA of the Customs Act, 1962 - goods in question are liable to be confiscated and also disallowed the duty drawback to the respondent - the Tribunal held that, since penalty has already been imposed under Section 114AA, the contention of the Revenue that the penalty should have been imposed under Section 114, deserves no merit - HELD THAT - We do not think that any of the questions of law raised deserve merit for consideration in this appeal filed under Section 130 of the Customs Act, 1962. The original authority has issued show cause notice proposing imposition of penalty under Section 114AA of the Act. The order of the original authority would also reveal that penalty was imposed only under Section 114AA, based on the show cause notice issued and the explanation received. If the authority was having the opinion that penalty ought to have been imposed under Section 114, they could have taken appropriate steps to the extent if any permissible under law. The appeal filed before the Tribunal challenging the order, by contending that the penalty ought to have been imposed under Section 114, cannot be sustained as lawful - Appeal dismissed.

Summary

Issues:
1. Challenge to penalty imposed under Section 114AA of the Customs Act, 1962 instead of Section 114.
2. Tribunal's decision on the appeal filed by the Revenue.
3. Questions of law raised in the appeal.

Analysis:
1. The Commissioner of Customs imposed a penalty of ?70,00,000 under Section 114AA of the Customs Act, 1962 on the respondent. The appellant contended that the penalty should have been imposed under Section 114 due to the confiscation of goods and disallowance of duty drawback. However, the Tribunal held that since no penalty was proposed or imposed under Section 114, the appeal cannot be granted. The Tribunal found no grounds supporting the imposition of penalty under Section 114, and thus upheld the penalty under Section 114AA. The High Court agreed with the Tribunal's decision, stating that the appeal challenging the penalty under Section 114 cannot be sustained as lawful.

2. The Tribunal was questioned on various legal and factual aspects, including the dismissal of the appeal against the order-in-original, the correctness of Sections 114 and 114AA of the Customs Act, and the failure to set aside the order-in-original. The High Court found that the original authority had issued a show cause notice proposing penalty under Section 114AA, and since the penalty was imposed accordingly, the Tribunal's decision to dismiss the appeal was upheld. The Court concluded that there was no illegality or impropriety in the Tribunal's order.

3. The High Court held that none of the questions of law raised in the appeal merited consideration. It was emphasized that the penalty was imposed under Section 114AA based on the show cause notice and explanation received, and any argument that it should have been under Section 114 was not valid. Consequently, the appeal was dismissed as lacking merit, with no substantial question of law warranting interference in the matter.