2017 (9) TMI 330 - HC - Customs

Penalty u/s 112(a) and 112(b) of the Customs Act, 1962 - The petitioners have contended that, they will prefer an appeal if the portion of imposition of penalty u/s 112(a) and Section 112(b) of the Customs Act, 1962 are set aside - Held that - There is some substance in the contention of the petitioners so far as the imposition of penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 in the facts of the case are concerned. 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 petitioners had allegedly successfully smuggled goods into India on other occasions, the adjudicating authority assumes that the petitioners are 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 three petitioners cannot be sustained - petition allowed.

Summary

Issues Involved:
Challenge to the order of the Commissioner of Customs regarding confiscation and penalty under the Customs Act, 1962.

Analysis:
The writ petition challenges an order passed by the Commissioner of Customs, which is appealable. The petitioners argue that a portion of the order is without jurisdiction. The petitioners were issued a show cause notice based on an intercept by the Directorate of Revenue Intelligence. The impugned order directed confiscation under Section 111(d) and 111(f) and imposed penalties under Section 112(a) and (b) of the Customs Act, 1962. The petitioners plan to appeal the confiscation and penalties. The petitioners contest the basis for invoking Sections 112(a) and 112(b) for penalty imposition, arguing that these sections govern separate fields and the authorities lacked a basis for calculating the penalties. One petitioner was penalized ?125 lacs, but there were no goods available for imposing the penalty under Section 112(b, rendering it arbitrary.

The impugned order is appealable, and the petitioners intend to appeal if the penalties under Sections 112(a) and 112(b) are set aside. The court finds substance in the petitioners' contention regarding the penalties. The adjudicating authority assumed guilt based on past alleged smuggling activities, imposing penalties without supporting material. The court sets aside the penalties imposed on three petitioners for smuggling goods into India in the past. The penalties imposed on the petitioners, ranging from ?5,00,000 to ?1,25,00,000, are annulled. The order clarifies that other penalties and directions remain unaffected.

The petition is disposed of without costs, granting the petitioners seven days to prefer an appeal. If an appeal is filed within the stipulated time, it should be considered within the limitation period. The court's observations in this judgment will not prejudice any party in the potential appeal process.