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2022 (12) TMI 485 - AT - CustomsReduction in the quantum of penalty - import of gold jewellery from Thailand without payment of Basic Custom Duty of 10% by misusing the benefit of exemption notification No.85/2004-Cus. Dated 31.08.2004 read with Notification No.101/2004-Cus. (NT) dated 31.08.2004 - resignation of the director on whom penalty was imposed - existence of mens rea or not - HELD THAT - Although initially seven (7) Bills of entry were in issue but at the Adjudication level only on the basis of one Bill of entry dated 23.3.2009 penalty has been imposed on the appellant herein under Sections 112(a) (b) and 114AA Customs Act without there being any finding of any mens rea on his part. The penalty has been imposed only on the basis that he was one of the Directors of M/s. Damasy Retail Jewellery Pvt. Ltd. at the relevant point of time. A perusal of the show cause notice suggest that suppression, mis-statement etc. everything has been attributed to M/s. Damasy Retail Jewellery Pvt. Ltd. but in the said show cause notice there is no whisper about any suppression or misstatement or abatement on the part of the appellant. No role has been assigned or alleged against the appellant there in the Show-cause notice. He has been penalized merely because he was the Director of the company during the relevant period. But both the authorities below have overlooked one fact that in his resignation letter dated 28.11.2008 while resigning from the post of country head, the appellant has specifically mentioned therein that he would not take any decisions after 30.11.2008 which in other words means that after that date he would not participate actively in any manner in the affairs of the company. Had the resignation been not there, still the department has failed to bring out any evidence on record suggesting any active role of the appellant in that single import/bill of entry in issue. It has not been established anywhere that the appellant is the beneficiary or has gained anything out of the import. The orders merely proceed on speculations as it uses the terms like the appellant must have experience or must have been aware . No penalty or conviction can be based merely on speculations. There has to be some role assigned to that person corroborated by some concrete evidence on record. In my view no one can be penalised merely on the basis of speculations/doubt. It is settled principle that the order needs to be passed within a reasonable period after the conclusion of hearing and the circular dated 05.08.2003 issued by Ministry of Finance, Deptt. of Revenue, Central Board of Excise Customs, as placed on record by the learned counsel, specifically laid down the time period to a maximum of one month for issuance of order from the date of conclusion of hearing. Same time limit of one month has been reiterated in the later Circular No. 1053/02/2017-CX dated 10.03.2017 and in latest instruction dated 18.11.2021 issued by Ministry of Finance, Department of Revenue it has been emphasised that instructions issued vide Master Circular dated 10.03.2017 should be adhere to - The Hon'ble Supreme Court in catena of decisions has laid down that an undue delay between conclusion of the arguments and delivery of judgement shakes the confidence of people in judicial system and affects the right of the parties. The impugned order is liable to be set aside - Appeal allowed.
Issues Involved:
1. Imposition of penalty on the appellant under Sections 112(a), 112(b), and 114AA of the Customs Act. 2. Appellant's resignation and its impact on liability. 3. Alleged suppression or misstatement by the appellant. 4. Combined penalty imposition legality. 5. Inordinate delay in pronouncement of the appellate order. Issue-wise Detailed Analysis: 1. Imposition of penalty on the appellant under Sections 112(a), 112(b), and 114AA of the Customs Act: The appellant challenged the penalty imposed by the Adjudicating Authority, which was upheld but reduced by the Commissioner of Customs (Appeals). The penalty was based on the import of gold jewelry from Thailand without paying the Basic Custom Duty of 10%, allegedly misusing exemption notifications. The appellant argued that he was not involved in the import transactions during the relevant period and that no specific role or mens rea was attributed to him in the Show Cause Notice. The Tribunal found that the penalty was imposed merely because the appellant was a Director at the time without concrete evidence of his active involvement or unlawful gain. 2. Appellant's resignation and its impact on liability: The appellant submitted his resignation as Country Head in November 2008 and as Director in March 2009. He argued that he ceased to take any decisions after November 2008. The Tribunal noted that the resignation letter indicated he would not participate in the company's affairs after November 2008. The Adjudicating Authority's decision to impose a penalty based on his directorship status during the import was found to be speculative without concrete evidence of his involvement. 3. Alleged suppression or misstatement by the appellant: The Show Cause Notice attributed suppression and misstatement to the company but did not specifically allege these against the appellant. The Tribunal observed that there was no evidence of the appellant's active role in the import transactions or any unlawful gain. The orders from the authorities below were based on assumptions rather than concrete evidence, leading the Tribunal to conclude that the penalty was unjustified. 4. Combined penalty imposition legality: The Tribunal found that the combined penalty imposed under Sections 112(a), 112(b), and 114AA was not legally permissible. The penalty should have been specified separately under each section. The Tribunal referred to previous judgments that set aside combined penalties due to the lack of specific attribution to each provision. The absence of exact amounts attributable to each section rendered the penalty invalid. 5. Inordinate delay in pronouncement of the appellate order: The appellant highlighted the delay of over a year in the pronouncement of the appellate order, which was against the mandate of expeditious disposal as per Circular No. 732/48/2003-CX and Section 128(4A) of the Customs Act. The Tribunal agreed that the delay was inordinate and affected the validity of the order. The Tribunal emphasized that justice should be timely and that undue delays undermine confidence in the judicial system. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order and the penalties imposed on the appellant. The decision was based on the lack of concrete evidence of the appellant's involvement, the improper imposition of combined penalties, and the inordinate delay in the appellate process. The appellant was granted consequential relief as per law.
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