2019 (4) TMI 144 - AT - Customs

Imposition of penalty - main plea raised by the appellant was since the other co-noticee has paid up the entire duty, interest and 25% penalty, proceedings has to be deemed to be concluded against all other noticees as per sub-section (1A)(2) of section 28 to Customs Act, 1962 - Held that - The co-noticee M/s. M.G. Trading Co., has paid-up the duty demand, interest as well as 25% penalty within 30 days from the issue of show-cause notice - proviso to sub-section (2) of section 28 of the Customs Act states that the proceedings in relation to co-noticees will stand concluded when such demand, interest and 25% penalty has been paid-up by one of the notices. Penalty do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the proceedings against co-noticees should be deemed concluded when one noticee has paid the duty, interest, and penalty as per the Customs Act, 1962 and relevant circulars?

Analysis:

The case involved the appellant, who was a co-noticee in a matter where the main noticee had paid the entire enhanced duty, interest, and 25% penalty. The appellant argued that since the co-noticee had paid the dues, the proceedings should be deemed concluded against all noticees. The original authority and the Commissioner (Appeals) confirmed the duty demand and imposed penalties on the appellant. The Tribunal initially dismissed the appeal, but the High Court allowed the appellant to file a misc. application for recall of the order, which was subsequently granted. The matter was brought before the Appellate Tribunal CESTAT Chennai for reconsideration.

The appellant's counsel contended that the co-noticee had indeed paid the entire duty, interest, and penalty, which was noted in the impugned order by the Commissioner (Appeals). Referring to the Customs Act and relevant circulars, the counsel argued that as per the proviso to sub-section (2) of section 28, proceedings against co-noticees should be deemed concluded when dues are paid by one noticee. The counsel cited a circular by the Board and decisions of the Tribunal to support this argument.

On the other hand, the Authorized Representative for the Revenue supported the findings in the impugned order, maintaining the penalty imposed on the appellant.

After hearing both sides and reviewing the records, the Tribunal noted that the co-noticee had paid the duty demand, interest, and penalty within the specified time frame. Citing the Customs Act and the circular issued by the Board, the Tribunal emphasized that when one noticee fulfills the payment requirements, proceedings against co-noticees should be deemed concluded. Referring to previous Tribunal decisions on similar matters, the Tribunal concluded that the penalty imposed on the appellant was unwarranted. Therefore, the Tribunal set aside the confirmation of penalty on the appellant and allowed the appeal with any consequential reliefs.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the proceedings against the co-noticees should be deemed concluded when one noticee has paid the duty, interest, and penalty as per the Customs Act and relevant circulars. The penalty imposed on the appellant was set aside, and the appeal was allowed with any necessary reliefs.