2008 (6) TMI 214 - HC - Customs

Whether the concurrent finding of fact recorded by the Tribunal is erroneous for non-consideration of the material evidence produced by the appellant before the Assessing Authority wherein he has stated that he had no knowledge that imported goods received by him are supplied to the Company in contravention of terms and conditions of the Notification No. 52/02? Held that - After careful perusal of the impugned common Judgment passed by the Tribunal we are in respectful agreement with the view taken by the Tribunal which does not call for interference with regard to levy of customs duty, excise duty and penalty imposed on the Company challenged in C.S.T.A. Nos. 2 3/2008. Therefore, we hold that the appeals are liable to be dismissed holding that re-framed substantial questions of law would not arise at all for the reason that the fact finding authority has recorded a finding of fact holding that the exempted company has contravened the terms and conditions of the exemption notification in not utilising the 100% exempted imported materials for manufacture of goods to export the same to the foreign countries and the said finding is concurred with by the appellate authorities. Therefore, we do not find any ground urged by the learned counsel Mr. Gururaj in this appeal are tenable in law, and therefore there is no need for us to interfere with the order of penalty imposed upon the Director of the company which has received 100% exported goods from the company.

Summary

Issues:
1. Levy of penalty for violation of terms and conditions of exemption notification under the Customs Act.
2. Imposition of customs duty and excise duty on duty-free imported goods.
3. Knowledge of the appellant director regarding receipt of duty-free imported goods.
4. Justification of penalty reduction by the Appellate Tribunal.
5. Contravention of terms and conditions of exemption notification by the appellant companies.
6. Appeal against penalty imposition under Sections 112(b) and 111(o) of the Act.

Analysis:

1. The appeals filed challenged the penalty imposed for violating terms of the exemption notification under the Customs Act. The appellants contended that penalties were unjustly levied, urging various grounds for setting aside the orders. The Assessing Officer found violations of conditions leading to diversion of duty-free imported goods, resulting in penalties under Sections 112(b) and 111(o) of the Act.

2. The Customs Appellate Tribunal upheld the penalties after following due procedure and considering evidence. The Tribunal found that the duty-free imported goods were diverted, contravening the exemption terms. The appellants argued that the goods were borrowed for manufacturing export goods, but the authorities did not accept this explanation, justifying the penalties imposed.

3. The issue of the appellant director's knowledge regarding the receipt of duty-free imported goods was raised. The director claimed lack of awareness, challenging the penalty imposition under Section 112(b) of the Act. However, the Tribunal held that the director had knowledge of receiving the duty-free goods, leading to the penalty imposition.

4. The Appellate Tribunal reduced the penalty amount, which the appellants contested as unjustified. The Tribunal's decision to lower the penalty was deemed nominal and not requiring interference by the Court. The Tribunal's reasoning was based on a conscious re-evaluation of facts and evidence on record.

5. The Court examined the contravention of terms and conditions of the exemption notification by the appellant companies. Despite explanations provided, the authorities found violations, leading to penalties. The Court agreed with the Tribunal's findings, concluding that the penalties and duties imposed were justified based on the facts presented.

6. The appeals against penalty imposition under Sections 112(b) and 111(o) of the Act were dismissed. The Court upheld the Tribunal's decisions, stating that the fact-finding authorities had correctly determined the contraventions of the exemption terms. The appeals of the Chief Executive Officer and the Director were both dismissed, with no costs awarded.