2010 (3) TMI 529 - HC - Customs

Penalty - the assessee filed an appeal before the Tribunal. The Tribunal only on the ground that in the show cause notice the Revenue had relied upon S. 112 of the Customs Act and could not levy the penalty relying upon S. 114 of the Act without considering the case of the Revenue on merits set aside the order. Held that - typographical error in mentioning correct provision of law or mentioning of wrong provision by oversight not ground for Tribunal to set aside order without examining case on merit. Impugned Tribunal order set aside. Matter remanded to Tribunal for fresh consideration on merit.

Summary

Issues:
1. Legality and correctness of the order passed by CESTAT on 13-2-2006 in Final Order 624/2006 questioned by Revenue.
2. Failure to fulfill export obligation leading to a show cause notice under S. 112 of the Customs Act and penalty under S. 114.
3. Tribunal setting aside the order based on the wrong provision of law in the show cause notice without considering the merits.

Analysis:
1. The High Court of Karnataka addressed the challenge to the order passed by the CESTAT on 13-2-2006 in Final Order 624/2006. The Revenue questioned the legality and correctness of this order.

2. The issue stemmed from the assessee's failure to meet the export obligation, resulting in a show cause notice under Section 112 of the Customs Act and the levy of a penalty under Section 114. The assessee appealed to the Tribunal, which set aside the order solely based on the incorrect citation of the law in the show cause notice by the Revenue, without delving into the merits of the case.

3. The Court emphasized that even if there was an error in quoting the law in the notice, the substance of the notice fulfilled the requirements of Section 114 of the Customs Act. The Court highlighted that such typographical errors or misquotations should not be grounds for setting aside an order without examining the case on its merits. Therefore, the Court concluded that the Tribunal should have considered the case on its merits and not solely on the technicality of the law citation. Consequently, the Court set aside the Tribunal's order and remanded the matter for fresh consideration on merits in accordance with the law.