2017 (7) TMI 1025 - HC - Customs

Imposition of penalty u/s 112(a) and Section 112(b) of the Customs Act, 1962 - high value electronic items - Held that - The provisions of Sections 112(a) and 112(b) of the Customs Act, 1962 are sought to be attracted in the present case by the impugned order. As the petitioner had allegedly successfully smuggled goods into India on other occasions, the adjudicating authority assumes that the petitioner is guilty of smuggling of the value as indicated in the impugned order. The penalty is imposed on an assumption. Such assumption is not supported by any material. Therefore such imposition of penalty on the petitioner cannot be sustained - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Jurisdiction of the impugned order
2. Imposition of penalty under Sections 112(a) and 112(b) of the Customs Act, 1962

Jurisdiction of the Impugned Order:
The writ petition challenged an order passed by the Commissioner of Customs, contending that a portion of the order was without jurisdiction. The petitioner argued that while a part of the order was appealable, the remaining portion lacked jurisdiction. The impugned order was based on a show cause notice issued to the petitioner after an intercept by the Directorate of Revenue Intelligence. The order included directions for confiscation under Section 111(d) and 111(f) of the Customs Act, 1962, as well as the imposition of penalties under Sections 112(a) and 112(b) of the same Act. The petitioner raised concerns regarding the imposition of penalties, stating that the authorities lacked a basis for invoking these provisions and calculating the penalties. It was argued that Sections 112(a) and 112(b) should not be applied simultaneously as they govern separate fields. The petitioner specifically objected to the penalty amount imposed, highlighting discrepancies in the application of the provisions.

Imposition of Penalty under Sections 112(a) and 112(b) of the Customs Act, 1962:
The petitioner expressed intent to appeal the imposition of penalties under Sections 112(a) and 112(b) if set aside. The court acknowledged the petitioner's contention regarding the penalties and found substance in the argument. The impugned order had imposed penalties based on an assumption that the petitioner was guilty of smuggling goods into India, without sufficient supporting material. The adjudicating authority assumed the petitioner's involvement in smuggling based on past incidents. However, the court deemed this assumption unsupported and unsustainable. Consequently, the court set aside the penalties imposed under Sections 112(a) and 112(b) of the Customs Act, 1962. Specific penalty amounts against individuals involved in smuggling were also mentioned in the order. It was clarified that the setting aside of penalties did not affect other directions and penalties imposed by the impugned order. The parties were granted liberty to take further legal steps concerning the surviving portions of the order. The writ petition was disposed of with no order as to costs, and it was emphasized that the observations made in the judgment would not prejudice any party in a potential appeal.