2016 (9) TMI 524 - HC - Customs

Restoration of order passed by first Appellate Authority - levy of redemption fine - Section 125 of the Customs Act, 1962 - imposition of penalty - Section 112(a) of the Customs Act, 1962 - amount of redemption fine and penalty increased buy the Tribunal - jurisdiction of Tribunal - Whether redemption fine and penalty, as determined by the first appellate authority, can be increased further by the Tribunal in the appeal filed by the assessee, especially when the appeal filed by the department against the same order passed by the first appellate authority had been dismissed? - Held that - It is only in the appeal filed by the department that the amount of penalty could be increased and for that the appeal filed by the assessee had to be dismissed. But in the case in hand, the facts are otherwise. The appeal filed by the revenue was specifically dismissed. In the appeal filed by the assessee, the order passed by the first appellate authority was set aside and the quantum of redemption fine and penalty was increased. That course was not possible in the appeal filed by the assessee, especially when the appeal filed by the department had been dismissed - order passed by the Tribunal set aside - order passed by the first appellate authority restored - amount of penalty and redemption fine as imposed by first appellate authority justified - appeal allowed - decided in favor of appellant.

Issues:
1. Whether imposition of fine and penalty is justified when goods were not restricted during the period in question?
2. Whether the impugned order passed by the Tribunal is perverse and contrary to its earlier orders?
3. Whether the Tribunal is justified to enhance fine and penalty in the appeal of the appellant?
4. Whether the amount of fine and penalty upheld by the Tribunal is justified when in identical cases the amount has been substantially reduced?
5. Whether imposition of fine and penalty is justified in the present case?

Analysis:

Issue 1:
The appellant challenged the imposition of a redemption fine and penalty when the goods were not restricted during the relevant period. The Tribunal increased the redemption fine and penalty imposed by the first appellate authority. The court considered whether such an increase was justified, especially when the department's appeal had been dismissed. The court held that the appeal filed by the department had been dismissed, and therefore, the increase in the penalty in the appellant's appeal was not permissible. The court allowed the appeal and set aside the Tribunal's order, restoring the first appellate authority's decision.

Issue 2:
The appellant contended that the impugned order passed by the Tribunal was perverse and contrary to its earlier orders. The Tribunal had increased the redemption fine and penalty in the appellant's appeal, which the appellant argued was without jurisdiction. The court examined whether the Tribunal had valid reasons for increasing the redemption fine and penalty. The court found that the appeal filed by the department had been dismissed, and the increase in penalty in the appellant's appeal was not justified. Consequently, the court allowed the appeal and set aside the Tribunal's order.

Issue 3:
The Tribunal had enhanced the redemption fine and penalty in the appellant's appeal, which the revenue supported, stating that valid reasons were provided for the increase. The court assessed the Tribunal's decision to increase the penalty and redemption fine. The court found that the increase in penalty in the appellant's appeal was not permissible since the department's appeal had been dismissed. As a result, the court allowed the appeal, answering the substantial question of law in favor of the assessee and against the revenue.

Issue 4:
The appellant questioned whether the amount of fine and penalty upheld by the Tribunal was justified, especially when similar cases had substantially reduced amounts. The court focused on whether the Tribunal could increase the redemption fine and penalty in the appellant's appeal, considering the dismissal of the department's appeal. The court concluded that the increase in penalty in the appellant's appeal was not valid, leading to the allowance of the appeal and the restoration of the first appellate authority's decision.

Issue 5:
The court deliberated on whether the imposition of fine and penalty was justified in the present case. The court analyzed the circumstances surrounding the increase in redemption fine and penalty in the appellant's appeal. The court found that the increase in penalty was not permissible since the department's appeal had been dismissed. Consequently, the court allowed the appeal, setting aside the Tribunal's order and reinstating the first appellate authority's decision.

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