2015 (2) TMI 26 - HC - Customs

Reduction in imposed penalty and redemption fine - Misdeclaration of goods - - Held that - From the cumulative reading of the Section 112 clause (b) it is made clear that if there is any misdeclaration of goods as well as value, penalty can be imposed more than the value of goods and in the instant case, such things have had happened and therefore, the assessee cannot take shelter under clause (ii) of Section 112(b) of the said Act. - It is an admitted fact that only due to misdeclaration of goods as well as duty, the present proceeding has became emanated. Since the present proceeding has become emanated only due to misdeclaration of goods as well as duty, it is needless to say that Clause (ii) of Sub-Section (b) of 112 of the said Act is not applicable to the present case. The Department is entitled to impose penalty on the basis of Section 112(b)(v) of the said Act. Therefore, it is quite clear that the contention put forth on the side of the appellant/assessee is not legally acceptable and the substantial questions of law settled in the present Civil Miscellaneous Appeal are not having substance - Decided against assessee.

Summary

Issues:
Challenge to Final Order in Civil Miscellaneous Appeal regarding Customs duty, redemption fine, and penalty.

Analysis:
The appellant was engaged in aluminum scrap business and was liable to pay Customs duty. A show cause notice was issued demanding Customs duty, redemption fine, and penalty. The Order-in-Original upheld these demands. An appeal was made to the Commissioner of Appeals, resulting in reductions in both penalty and redemption fine. Further appeal to the Appellate Tribunal also led to additional reductions. The present Civil Miscellaneous Appeal was filed against the Appellate Tribunal's decision.

At the outset, the substantial questions of law for consideration were outlined. These included the correctness of penalty exceeding the duty amount, justification of redemption fine without considering demurrage charges, and the validity of penalty imposed without proper consideration of relevant clauses and sections under the Customs Act.

The appellant's counsel argued that the penalty imposed exceeded the duty amount, contrary to Section 112(b)(ii) of the Customs Act, which limits the penalty to the duty amount or five thousand rupees, whichever is greater. However, the respondent's counsel pointed out the provisions of Section 112(b)(iii) to (v) of the Act, indicating that penalties could be imposed based on misdeclaration of goods and value.

The court analyzed Section 112(b) of the Customs Act, highlighting that penalties could exceed the value of goods in cases of misdeclaration. Since the present case involved misdeclaration of goods and duty, the appellant could not rely on Section 112(b)(ii) to challenge the penalty. The court emphasized that the Department could impose penalties under Section 112(b)(v) due to the misdeclaration, making the appellant's arguments legally untenable.

Ultimately, the court concluded that the appellant's contentions lacked legal merit, and the Civil Miscellaneous Appeal was dismissed. The Final Order by the CESTAT, confirming the penalties and fines, was upheld, and the appeal was dismissed without costs.