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2024 (8) TMI 267 - AT - CustomsSEZ unit - mis-declaration of the quantity as well as the value of the goods - penalty u/s 112(a) and/or 114(A) of the Customs Act 1962 - seeking relief of reduced penalty of 25% - relief sought on the ground that the adjudicating authority has not extended the option in the impugned order - HELD THAT - The statutory provision provides that the adjudicating authority must give an option for reduced penalty in the case the appellant pay the amount of duty, interest and 25% penalty under Section 114A within a period of one month form the date of order. Since, no such option was granted, the same option can be extended now. Accordingly, the appellant's penalty shall stand reduced to 25% under Section 114A subject to condition that the appellant pay total duty confirmed, interest thereon as per law and 25% penalty under Section 114A within a one month form the date of this order. From the 5th Proviso to Section 114A, it is crystal clear that where any penalty has been levied under Section 114A no penalty shall be levied under Section 112 or 114. In view of this clear legal position, since the penalty has been imposed under Section 114A, no penalty under Section 112(a) will survive. Accordingly, the penalty imposed under Section 112(a) is set aside. Penalty on the Director - HELD THAT - It is found that though the director, Shri Kamal Makkar, was directly involved in overall affair of filling bill of entity and knowing the mis-declaration of the goods is liable for penalty. However, taking into consideration that the appellant company has under taking to pay duty, interest and penalty and considering overall facts and circumstances of the case - the penalty imposed on the director Shri Kamal Makkar, needs to be reduced. Accordingly the penalty on Shri Kamal Makkar is reduced from Rs. 5 Lakh to Rs. 3 Lakh under Section 112(a) and from Rs. 2 Lakh to Rs. 1 Lakh under Section 114A. Both the appeals are partly allowed.
Issues:
1. Mis-declaration of goods and customs duty evasion. 2. Confiscation of goods and imposition of penalties under various sections of the Customs Act, 1962. 3. Appeal against the order passed by the Principal Commissioner of Customs. Issue 1: Mis-declaration of goods and customs duty evasion: The appellant, an SEZ unit, mis-declared the quantity and value of goods in a container leading to a show cause notice for confiscation of goods valued at Rs. 2,21,21,536 under various sections of the Customs Act, 1962. The Principal Commissioner of Customs adjudicated the matter, confiscating the goods and imposing a penalty of Rs. 10,00,000 under Section 112(a) of the Act. Issue 2: Confiscation of goods and imposition of penalties: The Principal Commissioner's order confiscated the seized goods and imposed a redemption fine of Rs. 10,00,000 as an alternative to confiscation. Additionally, a penalty of Rs. 10,00,000 was levied on the appellant under Section 112(a) of the Customs Act, 1962. The appellant appealed this order before the Tribunal seeking relief regarding the penalty and the option of a reduced penalty of 25%. Issue 3: Appeal against the order: The appellant appealed the Principal Commissioner's order before the Tribunal, arguing that the option of a 25% penalty reduction was not provided in the original order. The Tribunal upheld the confirmation of demand, redemption fine, interest, and penalty under Section 114A. However, it agreed that the appellant should be given the option of a reduced penalty of 25% under Section 114A, provided the appellant pays the total confirmed duty, interest, and penalty within a month. In the judgment, the Tribunal carefully considered the submissions of both parties and analyzed the legal provisions under the Customs Act, 1962. It concluded that the penalty under Section 112(a) could not be imposed since a penalty under Section 114A had already been levied. The Tribunal also reduced the penalty on the director of the appellant company, considering the overall circumstances of the case. Ultimately, the appeals were partly allowed, reducing the penalties imposed on the appellant and its director in line with the legal provisions and the facts of the case.
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