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2023 (5) TMI 617 - AT - CustomsAbsolute Confiscation - Gold - enhancement of penalty - appeal filed by the appellant rejected stating that appellant did not pay the mandatory pre-deposit - Section 128A(3)(a) of the Customs Act, 1962 - HELD THAT - The original authority has set aside customs duty demanded and therefore, there was no customs duty demand in the original order if the goods were not redeemed. The goods were not redeemed. Accordingly, there was no need for any pre-deposit by the appellant for filing appeal before the Commissioner (Appeals). Therefore, to that extent finding of learned Commissioner (Appeals) in the impugned order is erroneous. The original authority did not impose any penalty whereas learned Commissioner (Appeals) has enhanced penalty to Rs.8,40,467/- and such enhancement of penalty was done without following the procedure laid down in first proviso of sub-section (3) of Section 128 of the Customs Act, 1962 which requires learned Commissioner (Appeals) to put the appellant before him on notice and give him a reasonable opportunity of showing cause against proposed order of enhancing penalty. The impugned order is not sustainable - the matter is remanded to Commissioner (Appeals) for deciding afresh both the appeals filed by the appellant and Revenue by following the proper procedure - appeal is allowed by way of remand.
Issues involved:
The judgment involves the modification of an Order-in-Original related to the confiscation of gold, imposition of customs duty, and penalty. The key issues include the rejection of the appellant's appeal for not making a mandatory pre-deposit, the application of Section 128A(3)(a) of the Customs Act, 1962 by the Commissioner (Appeals), and the failure to follow the procedure for enhancing penalty as per the proviso under the said section. Confiscation of Gold and Customs Duty: The case involved the interception of goods by Revenue, with the appellant claiming ownership. The goods were classified under Customs Tariff Item No. 71081200, and the assessable value and customs duty were determined. The Original Authority ordered the confiscation of the gold and provided an option for redemption on payment of a fine. The Commissioner (Appeals) modified the order to absolute confiscation of the gold, dropping the customs duty demand and penalty, leading to the appellant's appeal before the Tribunal. Failure to Follow Procedure for Penalty Enhancement: The appellant argued that no pre-deposit was required as the original authority had set aside the customs duty demand. The Commissioner (Appeals) was criticized for not following the procedure under Section 128A(3)(a) of the Customs Act, 1962, which mandates a reasonable opportunity for showing cause before enhancing penalties. The Revenue's representative acknowledged the failure to follow the prescribed procedure. Judgment and Remand: The Tribunal found errors in the Commissioner (Appeals)'s order, noting the absence of a customs duty demand if the goods were not redeemed and the lack of penalty imposition by the original authority. The Tribunal ruled the impugned order as unsustainable, setting it aside, and remanded the matter back to the Commissioner (Appeals) for fresh consideration, emphasizing adherence to proper procedures as prescribed in the Customs Act, 1962. Separate Judgment: The judgment was delivered by Hon'ble Mr. Anil G. Shakkarwar, Member (Technical), at the Appellate Tribunal CESTAT Mumbai on 08.05.2023.
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