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2022 (2) TMI 260 - AT - CustomsPenalty u/s 112(a) of the Customs Act, 1962 - Smuggling - specific case of the Revenue was that there was a mismatch in as much as certain items were missing, the quantity declared was much less than the actual quantity and the undervaluation, which clearly amounts to giving the incorrect figure - HELD THAT - When he has admitted to having received invoice and packing list, nothing prevented the appellant from cross-verifying before sending the same for Customs clearance, which was the minimum that was expected of the appellant, which act amounts to a clear omission, for which penalty under Section 112(a) ibid. appears to be correct. This is also for the reason that similar penalty was imposed on the other co-noticees, who appear to have accepted the same without agitating further. In the case of RAM LAL KATARIA VERSUS COLLECTOR OF CENTRAL EXCISE 1990 (10) TMI 190 - CEGAT, CALCUTTA , it is held that the confession of the co-accused cannot be the sole criterion, but here it is not just the confession, but statement of each person is the link to the whole chain - The same view is taken in CHANDRA SHEKHAR R. SHUKLA VERSUS COMMISSIONER OF CUSTOMS, (IMPORTS) 2019 (6) TMI 277 - CESTAT MUMBAI and hence, factually, the case on hand stands on a different footing. But however, considering the above facts and circumstances, the quantum of penalty which is normally levied as a deterrent, is very high and hence, the same is directed to be reduced to ₹ 10,000/-. There are no reasons to interfere with the findings of the First Appellate Authority, except that the amount of penalty which is ordered to be reduced to ₹ 10,000/- - appeal allowed in part.
Issues Involved:
1. Whether the penalty under Section 112(a) of the Customs Act, 1962 is rightly levied. 2. Whether the First Appellate Authority committed gross injustice and violated principles of natural justice. 3. Whether the First Appellate Authority erred in confirming the impugned order resulting in the confiscation of goods and sustaining the penalty. Detailed Analysis: 1. Penalty under Section 112(a) of the Customs Act, 1962: The primary issue was whether the penalty under Section 112(a) of the Customs Act, 1962 was rightly levied on the appellant. Section 112(a) stipulates that any person who, in relation to any goods, does or omits to do any act which would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, is liable for penalty. The appellant argued that he did not fall under the definition of 'importer' as per Section 2(26) of the Act. However, the tribunal clarified that Section 112(a) covers "any person," not just the importer. The authorities found that the goods were liable for confiscation due to misdeclaration and undervaluation. The appellant’s involvement was established through a chain of statements from co-noticees, leading to the conclusion that the appellant's omission in verifying the documents amounted to a clear omission, justifying the penalty under Section 112(a). However, the tribunal reduced the penalty amount to ?10,000 considering the circumstances. 2. Gross Injustice and Violation of Principles of Natural Justice: The appellant contended that the First Appellate Authority committed gross injustice by violating principles of natural justice, exhibiting bias, and non-application of mind. The appellant argued that the authority traveled beyond the scope of the appeal and did not consider the factual and legal submissions. The tribunal reviewed these contentions but did not find substantial grounds to interfere with the findings of the First Appellate Authority, except for reducing the penalty amount. 3. Error in Confirming the Impugned Order and Sustaining Penalty: The appellant argued that the First Appellate Authority erred in confirming the impugned order, resulting in the confiscation of goods without naming the importer, and in sustaining the penalty without considering the statutory mandate under Section 112(a). The tribunal noted that the Revenue's investigation revealed a mismatch in declared and actual quantities and undervaluation, leading to the conclusion that the goods were liable for confiscation. The tribunal found that the appellant's failure to verify the documents before customs clearance amounted to an omission, justifying the penalty. However, the tribunal acknowledged that the penalty amount was high and reduced it to ?10,000. Conclusion: The tribunal upheld the findings of the First Appellate Authority regarding the appellant's liability under Section 112(a) of the Customs Act, 1962, but reduced the penalty amount to ?10,000. The tribunal did not find sufficient reasons to interfere with the First Appellate Authority's decision on other grounds. The order was pronounced in the open court on 04.02.2022.
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