2018 (10) TMI 42 - AT - Customs

Penalty u/s subsections (a) and (b) of Section 112 of Customs Act 1962 - Smuggling - Confiscation - Penalty - Held that - A reading of the provisions indicates very clearly that they are under different domains. Whereas subsection (a) envisages an action of commission or omission in relation to the goods which would render the goods liable for confiscation under Section 112 of Customs Act 1962; Subsection of (b) of Section 112 envisages certain act concerning the goods therefore it has to be understood that both the provisions are in a different spheres of operation. The learned Commissioner has erred in putting both the subsections together while imposing penalty. It was incumbent on the part of the adjudicating authority to clearly satisfy the offence of each of the persons involved and then to apply the penalty provisions as the commissions or omissions by the respective persons may invite - the matter has to go back to the original authority for appreciating the facts vis- -vis penal provisions and to pass a suitable order. Imposition of penalty on truck owners/drivers - Held that - As the case itself is remanded back for a fresh consideration on the issue of imposition of penalties it would not be proper at this juncture to pass a judgment on part of the order. Appeal allowed by way of remand.

Summary

Issues:
1. Imposition of penalties under Sections 112(a) and 112(b) of the Customs Act, 1962.
2. Confiscation of goods and lorries, and imposition of penalties on individuals involved in attempted smuggling.
3. Appeal against the Order-in-Original issued by the Commissioner of Customs.

Analysis:

Issue 1: Imposition of penalties under Sections 112(a) and 112(b) of the Customs Act, 1962:
The appellants contested the penalties imposed by the Commissioner, arguing that the provisions under Section 112(a) and 112(b) are distinct. They referenced a previous case to support their claim, emphasizing that Section 112(a) pertains to acts before importation, requiring mens rea, while Section 112(b) relates to actions post-importation. The Tribunal agreed with the appellants, noting that the penalties must align with the specific actions of each individual involved. Consequently, the matter was remanded to the original authority for a proper assessment of the facts and application of penalty provisions.

Issue 2: Confiscation of goods and lorries, and penalties on individuals involved in attempted smuggling:
The Commissioner had initially confiscated the goods, allowed redemption on payment, and imposed penalties on various individuals, including the drivers of the lorries. However, the Tribunal acknowledged the need for a distinction between Sections 112(a) and 112(b) in determining penalties. As a result, the case was remanded for a fresh evaluation to ensure the penalties were appropriately assigned based on individual culpability.

Issue 3: Appeal against the Order-in-Original issued by the Commissioner of Customs:
The appeals filed by the concerned individuals challenged the Order-in-Original issued by the Commissioner of Customs. The appellants did not contest the merits of the case but were dissatisfied with the penalties imposed. The Tribunal, after considering the arguments presented, decided to remand the case back to the original authority for a thorough review and proper application of penalty provisions.

In conclusion, the Tribunal found merit in the appellants' arguments regarding the differentiation between Sections 112(a) and 112(b) of the Customs Act, 1962. The case was remanded to the original authority for a reassessment of the penalties imposed on the individuals involved in the attempted smuggling, ensuring that the penalties align with the specific actions of each party. The decision highlighted the importance of a clear understanding of legal provisions in imposing penalties in customs-related cases.