2024 (7) TMI 626 - AT - Customs

Levy of penalty u/s 112(a) of the Customs Act, 1962 - containers not re-exported within a period of 6 months from the date of import, violating condition of N/N. 104/94-Cus dated 16.03.1994 - HELD THAT - The Learned Adjudicating Authority has given one sided story of the department however, the appellant have made a detailed defense submission, on the fact as well as on the legal issue but from the perusal of the impugned order particularly with regard to imposition of penalties on the present appellants no discussion and finding was given. In the matter related to imposition penalty on the present appellants the Adjudicating authority must reconsider the matter carefully considering the submission made by the appellant and thereafter pass a speaking and reasoned order. The impugned order is set aside - appeal allowed by way of remand.

Issues:
1. Imposition of penalties under Section 112(a) of the Customs Act for failure to re-export containers within the stipulated time period.
2. Premature seizure of goods by the Customs Department before the expiry of the specified time limit.
3. Liability for penalty and confiscation of goods for failure to re-export within the prescribed period.
4. Imposition of penalty in cases where there was no intention to evade customs duty.
5. Liability of Chairman and Managing Director for penalties and confiscation of goods.

Analysis:

1. Imposition of Penalties under Section 112(a):
The appeal challenged the penalties imposed under Section 112(a) for failure to re-export containers within the stipulated time. The appellant argued that penalties cannot be imposed solely for non-payment of duty declared in the Bill of Entry. They contended that the company had sought permission to clear the containers in the domestic market with payment of duty and interest, which was granted by the Customs Authority. The appellant also highlighted that the permission for filing non-EDI Bill of Entry had not been challenged by the Revenue, questioning the basis for confiscation and penalty imposition.

2. Premature Seizure of Goods:
The appellant argued that the Customs Department initiated seizure actions before the expiry of the 6-month period specified in the relevant notification. They provided instances where goods were seized even before the completion of the stipulated time limit, contending that such actions were premature and not in line with the notification's provisions. The argument emphasized that the actions of the Respondent were premature and not legally justified.

3. Liability for Penalty and Confiscation:
The appellant contended that failure to re-export goods within the prescribed period should only attract a demand for duty and interest, not confiscation or penalty. Referring to Notification No. 104/94-Cus, the appellant argued that the imposition of penalties for non-re-export was not warranted, especially considering the absence of ill intention on the part of the company or the appellants. Citing precedents, the appellant emphasized that failure to re-export should not automatically lead to penalties.

4. Imposition of Penalty without Intention to Evade Duty:
The appellant argued that the company's failure to re-export goods was due to financial constraints and lack of proper controls, not an intention to evade customs duty. They highlighted cases where penalties were not imposed in similar situations, emphasizing that penalties should not be levied in the absence of intent to evade duty.

5. Liability of Chairman and Managing Director:
The appellant contended that the Chairman and Managing Director should not be held liable for penalties and confiscation unless they were directly involved in the offense. They argued that since the appellants did not engage in day-to-day activities and had designated responsibilities to other personnel, they should not be penalized for the company's actions. Citing relevant decisions, the appellant sought relief for the Chairman and Managing Director.

In the final judgment, the Tribunal set aside the impugned order and remanded the case to the adjudicating authority for a fresh decision. The Tribunal noted the one-sided nature of the original order and directed a reconsideration, emphasizing the need for a detailed and reasoned decision, especially regarding the imposition of penalties on the appellants.

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