2024 (5) TMI 79 - AT - Customs

Benefit of reduced penalty of 15% u/s 28(5) - Delay in payment of penalty due to Public Holiday - The appellant voluntarily paid the differential BCD and interest upon detection of the misclassification - Importation of drawings and designs on paper made with aid of computer - Wrongly classification of the imported goods and claim of exemption - wilful misstatement or suppression of facts - HELD THAT - No evidences are available on record to show that the appellant had bona-fide intention in claiming wrong classification of the disputed goods and availment of the exemption from payment of the BCD under the notification dated 17.03.2012 read with notification dated 30.06.2017. It is also an undisputed fact that the appellant had voluntarily paid the differential BCD and interest amount upon detection of wrong classification by the DRI. The reduced penalty amount as per sub-section (5) of Section 28 ibid was also paid suo-moto by the appellant, consequent upon receipt of the SCN. Thus, it cannot be said that the department s action in invoking the penal provisions u/s 114A ibid is not proper or justified. In the case in hand, since 14th and 15th of December were being holidays as second Saturday and Sunday, payments made by the appellant in the designated bank on 16.12.2019 would be considered as the deposit made within the stipulated time frame. Since, the appellant has complied with the requirement of sub-section (5) read with sub-section (6) of Section 28 ibid, in our considered view, payment of reduced amount of penalty @15% of the BCD amount would be considered as sufficient compliance in terms of the statutory provisions. Since, the appellant in this case had deposited such reduced amount of penalty, as per Section 10 of the General Clauses Act, 1897 read with Section 28 ibid, in our considered view, such deposit should meet the ends of justice for the purpose of the benefit provided for reduction in the quantum of penalty. Thus, the impugned order, imposing equal amount of penalty shall not be sustained for judicial scrutiny. Thus, the impugned order to the extent it has confirmed equal amount of penalty on the appellant is set aside and the appeal to such extent is allowed in favour of the appellant, holding that the appellant would be liable to pay the reduced amount of penalty at the rate of 15%, which they have already complied with.

Summary

Issues Involved:
Classification of imported goods under Customs Tariff Item (CTI) 4906 00 00 vs. CTI 4911 99 20, imposition of penalty under Section 114A of the Customs Act, 1962, and compliance with the statutory provisions regarding payment of reduced penalty under Section 28(5) of the Customs Act.

Summary of the judgment:

1. The appellant imported goods and claimed classification under CTI 4906 00 00 with exemption from Basic Customs Duty (BCD). Directorate of Revenue Intelligence (DRI) found the goods classifiable under CTI 4911 99 20. Appellant admitted the error, paid the differential BCD, and deposited 15% penalty under Section 28(5) of the Customs Act.

2. Appellant argued that penalty under Section 114A cannot be imposed as there was no collusion, and the reduced penalty was paid within 30 days of receiving the show cause notice (SCN). Revenue contended that penalty was justified as per Section 114A and the reduced penalty was paid late.

3. The Tribunal found that the appellant accepted the correct classification by DRI, voluntarily paid the differential BCD and interest, and complied with the reduced penalty payment. The impugned order imposing equal penalty was deemed unjustified.

4. Referring to the General Clauses Act, the Tribunal held that the reduced penalty payment made within a reasonable time frame, considering holidays, should be deemed compliant with statutory provisions. Citing a Gujarat High Court case, the Tribunal extended the deadline for payment to the next working day.

5. Consequently, the Tribunal set aside the impugned order confirming equal penalty, allowing the appeal in favor of the appellant. The appellant was held liable to pay the reduced penalty of 15%, already paid by them.

(Order pronounced in open court on 30.04.2024)