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Whether penalty is imposable under Section 112 of the Customs Act when goods have been confiscated under Section 120 of the Customs Act. Detailed Analysis: Issue 1: Imposition of Penalty under Section 112 of the Customs Act The case involved appeals arising from a common order passed by the Commissioner of Customs, focusing on the imposition of penalties under Section 112 of the Customs Act. The appellants were accused of smuggling watch parts and wrist watches, leading to the confiscation of goods under Section 120 of the Customs Act. The advocate for the appellants argued that penalties under Section 112 could only be imposed when goods were liable for confiscation under Section 111 of the Customs Act. The advocate cited a precedent where it was held that misdirected penalties under Section 112 were not justified when proceedings were covered by a different section. Additionally, the advocate contended that penalties had already been imposed for the alleged smuggling offense by the Commissioner of Customs, Meerut, covering all seized and cleared goods. The argument emphasized that imposing penalties twice for the same offense would amount to double jeopardy. Issue 2: Counterarguments and Legal Standpoint In response, the learned DR argued that the appellants had not raised the plea regarding penalty imposition under Section 112 before the Adjudicating authority, questioning the timing of raising new arguments before the Appellate Tribunal. The DR invoked Sections 111(d) and 111(p) of the Customs Act, asserting that penalties under Section 112 were justifiable due to the smuggling of watch parts that led to the manufacturing of wrist watches. The DR supported the Commissioner's findings and highlighted the Commissioner's authority to invoke penalties under Section 117 of the Customs Act, referencing legal precedents to justify the imposition of penalties. Judgment and Resolution After considering both sides' submissions, the Tribunal ruled that penalties under Section 112 of the Customs Act were not applicable in the present case. The Tribunal emphasized that penalties could only be imposed when goods were liable for confiscation under Section 111, which was not the scenario with the wrist watches manufactured from smuggled parts. Citing a previous case, the Tribunal set aside the penalties imposed on all appellants under Section 112. Regarding the argument on penalties under Section 117, the Tribunal decided not to delve into that issue, as the appellants had already been penalized for smuggling watch parts by the Commissioner of Customs, Meerut. Consequently, the Tribunal overturned the impugned order imposing penalties on the appellants, considering it unjust to penalize them separately for goods manufactured from the smuggled watch parts. This detailed analysis of the judgment provides a comprehensive overview of the legal issues, arguments presented by both parties, and the Tribunal's final decision on the imposition of penalties under the Customs Act.
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