2007 (3) TMI 332 - HC - Customs

Levy of penalty Another person imported goods by using appellant s advance licence - penalty of Rs. 25 lakhs on admission of transfer of imported goods to another person grievance on violation of natural justice on grant of adjournment - we are of the view that the contention of natural justice has no legs to stand. Further, it is seen that adjournments were granted on two occasions at the instances of the appellant - Grant of adjournment is always discretionary in terms of power of the Adjudicating Authority. - Admittedly, all the three partners have chosen to play virtually a fraud by using the licences for the purpose of making money in the case on hand. The same has been held to be proved by both finding authorities. In the light of section 112(b)(ii), the penalty cannot be said to be on the higher side plea for reduction of penalty not acceptable - We see from the material on record that licence was obtained in the year 1992 and the transaction has taken place right from 1992 onwards. Search has been carried out only in the year 1996 and thereafter, the penalty proceedings initiated in the year 2000 and an adjudicating order passed in 2001. Appeal filed in the year 2001 has been disposed of in the year 2005 HC are very much concerned with regard to the delay in these matters. High Court has to remind the authorities that these matters are to be adjudicated at the earliest point of time in the larger interest of Public Revenue. We do hope that the authorities do hasten the process at least in future cases in the interest of revenue of the State. No grounds. Appeal is rejected.

Summary

Issues:
Levy of penalty on partners for violations of Customs provisions, violation of natural justice in considering appellant's reply, excessive penalty amount, confirmation of penalty by Tribunal, delay in adjudication process.

Levy of Penalty:
The appellant, a former partner in K.K. Industries, was aggrieved by the confirmation of a penalty by the Tribunal for Customs duty evasion. The Customs Authorities issued a show cause notice proposing a penalty on the partners for violations. The Commissioner levied a penalty of Rs. 25 lakhs on each partner, which was unsuccessfully challenged before the Tribunal.

Violation of Natural Justice:
The appellant argued that there was a violation of natural justice as his reply was not considered by the authorities. The appellant claimed innocence and argued that the penalty amount was excessive. However, the Standing Counsel contended that the material on record supported the orders passed by the Commissioner.

Confirmation of Penalty by Tribunal:
After careful consideration of the material on record, it was found that incriminating evidence was obtained during a search at K.K. Industries' premises. The Commissioner confirmed the penalty based on admissions by the partners regarding the misuse of import licenses and materials. The Tribunal rejected the appeal, finding no legal errors in the Commissioner's decision.

Excessive Penalty Amount:
The appellant claimed ignorance and innocence, attributing blame to other parties and stating that the penalty was based on suspicion. However, the Commissioner confirmed the penalty after analyzing statements and admissions by the partners, concluding that the penalty was justified based on the facts of the case.

Delay in Adjudication Process:
The High Court expressed concern over the delay in adjudicating the matter, highlighting the importance of timely resolution in cases involving revenue to the Central Government. The Court urged authorities to expedite such proceedings in the future for the benefit of public revenue. Ultimately, the appeal was rejected.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the case and the Court's findings on each matter.