2021 (12) TMI 687 - HC - Customs

Penalty u/s 112 of CA - amount not exceeding the duty sought to be evaded on such goods - quantification of amount involved in the case - HELD THAT - The Commissioner, depending upon the role each one of the individuals covered in paragraph 6 of the order has played/exercised his jurisdiction, discretion and imposed penalty. The penalty imposed on individuals dealt with in paragraph 6 of the order dated 13.04.2015 varies from ₹ 15 crore to ₹ 1 lakh. When it comes to subject Officers, the Commissioner refrained from imposing penalties. Therefore, this begs the very question, namely, whether the Commissioner has properly and correctly exercised the jurisdiction vested in him by Section 112 of the Act. First question that may come out for consideration before the Tribunal is not whether the penalty imposed on a particular individual is justified etc., but, the question is whether the non-imposition of penalty on respondent is tenable and in accordance with law. In the particular circumstances of the case, the question for decision before the Tribunal is Whether refraining from imposition of penalty is valid and legal? The question is de hors fiscal limits and pure question of law. The order under appeal is set aside. Matter remitted to CESTAT for consideration and disposal in accordance with law, along with the appeal pending in the matter of Anil Kumar - answered in favour of the appellant and against the respondent.

Issues:
1. Appeal under Section 130 of the Customs Act 1962 against the Final Order of the Customs, Excise and Service Tax Appellate Tribunal.
2. Discretion exercised by the Commissioner of Customs in imposing penalties on individuals involved in a smuggling case.
3. Interpretation of fiscal limits for filing appeals before the CESTAT.
4. Validity of the non-imposition of penalty on specific officers by the Commissioner.

Analysis:

Issue 1:
The appellant filed an appeal under Section 130 of the Customs Act 1962 against the Final Order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The appeal was based on the Commissioner of Customs being aggrieved by the Final Order dated 08.12.2017 in Appeal No. C/21692/2015.

Issue 2:
The Commissioner of Customs exercised his discretion in imposing penalties on individuals involved in a smuggling case. Penalties ranging from ?1 lakh to ?15 crores were imposed on various individuals. Notably, the Commissioner refrained from imposing penalties on certain officers, including C. Madhavan and Anil Kumar. This decision raised the question of whether the Commissioner correctly exercised his jurisdiction under Section 112 of the Customs Act.

Issue 3:
The appellant argued that the monetary limits stipulated by Circulars for filing appeals were not applicable to the case. It was contended that the fiscal limits should not prevent the consideration of the primary question concerning the jurisdiction of the Commissioner of Customs under Section 112 of the Act. The dismissal of the appeal based on fiscal limits was deemed unsustainable and illegal.

Issue 4:
The validity of the non-imposition of penalty on specific officers by the Commissioner was challenged. The Tribunal was tasked with determining whether refraining from imposing penalties on these officers was legally valid. This question was considered a pure question of law, independent of fiscal limits, and required examination by the Tribunal.

In conclusion, the High Court set aside the order under appeal and remitted the matter to CESTAT for further consideration. The judgment clarified that none of the issues on merits between the parties were examined, leaving them open for decision by the Tribunal. The decision highlighted the importance of ensuring the correct exercise of jurisdiction by the Commissioner of Customs and the legality of non-imposition of penalties on specific officers.

← Previous Next →