2015 (1) TMI 117 - HC - Customs

Enhancement of penalty - Power of Tribunal u/s 129b(2) - No notice issued - Held that - Tribunal has recorded that though notice was issued to the respondent, he has not chosen to appear before the Tribunal. Therefore, it would not lie in the mouth of the appellant to state that no notice was issued by the Tribunal before an order of enhancement is passed. Power to enhance penalty - Held that - appellant has misconstrued the Section 129B. All that Section 129B(2) of the Act contemplates is that after passing an order under Section 129B(1) of the Act, if the Tribunal, at any time within six months from the date of such order passed under Section 129B(1) of the Act, decides to rectify any mistake apparent from the record, it shall make amendment to any order passed under Section 129B(1) of the Act and shall make such amendments if the mistake is brought to its notice by the Commissioner of Customs or the other party to the appeal. In such event, the proviso to Section 129B(2) of the Act mandates issuance of notice. In the case on hand, it is not rectification of mistake by the Tribunal. Therefore, proviso to Section 129-B of the Act does not apply to the facts of the present case. - Decided in favor of Revenue.

Summary

Issues:
1. Service of notice in appeal
2. Power of Tribunal to enhance penalty
3. Entitlement of Commissioner of Customs to file an appeal

Analysis:
1. Service of Notice in Appeal:
The appellant challenged an order by the Customs, Excise and Gold (Control) Appellate Tribunal, questioning the lack of notice service. The Tribunal noted that notice had been issued but the respondent did not appear, leading to a ruling against the appellant. The Tribunal's decision was based on the proviso to Section 129B(2) of the Customs Act, which mandates notice before enhancing penalties. As the notice was issued but not responded to, the appeal on this issue was dismissed in favor of the department.

2. Power of Tribunal to Enhance Penalty:
The appellant contested the Tribunal's power to enhance penalties without proper notice. Section 129B(2) of the Act allows the Tribunal to rectify mistakes within six months of an order, with notice required for any amendment increasing liability. The court clarified that the provision applies to rectifying mistakes, not relevant in this case. Consequently, the Tribunal was deemed to have acted within its authority in enhancing the penalty without additional notice, leading to a ruling against the appellant in this regard as well.

3. Entitlement of Commissioner of Customs to File an Appeal:
The case involved the Commissioner of Customs appealing an order against the Collector of Customs. The question was whether the Commissioner, holding the same rank as the Collector, could be considered an aggrieved party under the Act. The judgment did not explicitly address this issue, focusing primarily on the procedural aspects of notice and penalty enhancement. Therefore, no specific ruling was provided regarding the Commissioner's entitlement to file an appeal based on the rank similarity with the Adjudicating Authority.

In conclusion, the High Court of Madras dismissed the appeal, ruling against the appellant on both issues raised concerning notice service and the Tribunal's power to enhance penalties. The judgment did not delve into the Commissioner of Customs' entitlement to appeal, focusing solely on the procedural and statutory aspects of the case.