2020 (9) TMI 658 - AT - Customs

Penalty - Anti Dumping Duty (ADD) deposited with interest before issuance of SCN - validity of SCN - quantum of penalty - HELD THAT - The appellant had deposited the entire amount of Anti Dumping Duty along with interest before issuance of the show cause notice. Since the department has accepted such facts, that as per the provisions of sub-section(5) of Section 28 ibid, the appellant was required to be issued with the show cause notice only for deposit of the penalty amount of 15% of the short levy duty. However, instead of issuing the show cause notice for recovery of the 15% amount of penalty, the department had proceeded against the appellant for confirmation of the 100% penalty in respect of the short paid amount of duty - Since, there is no ambiguity in interpretation of the provisions of sub-section (5) of Section 28 ibid, with regard to the quantum of penalty to be deposited, the benefit of reducing amount of penalty of 15% should be available to the appellant. The impugned order, to the extent it has upheld the adjudged demand of penalty confirmed in the adjudication order is set aside and the appeal to such extent is allowed in favour of the appellant, holding that the appellant should liable to pay penalty of 15% of the adjudged amount of duty confirmed/paid by it before initiation of the show cause proceedings - Appeal allowed in part.

Summary

Issues:
- Recovery of Anti Dumping Duty along with interest and penalties
- Interpretation of provisions of Section 28 of the Customs Act, 1962
- Applicability of penalty amount in the case

Analysis:
The judgment pertains to an appeal against an order passed by the Ld. Commissioner of Customs (Appeals) regarding the recovery of Anti Dumping Duty, interest, and penalties from the appellant. The appellant, engaged in trading imported goods, had imported goods from China instead of Malaysian origin, triggering the levy of Anti Dumping Duty. Show cause proceedings were initiated against the appellant for recovery of the Anti Dumping Duty, interest, and penalties. The Ld. Commissioner (Appeals) upheld the demands, leading to the appellant appealing before the Tribunal.

The appellant contended that the duty and interest amounts were paid before the show cause notice, hence no proceedings for penalty recovery should have been initiated. The appellant argued that since the Bills of Entry were assessed without challenge, the department couldn't issue a show cause notice for recovery of short levied/non-levied duties. The appellant relied on a Tribunal decision to support their case.

On the other hand, the Revenue representative argued that since the penalty amount was not paid, the appellant should be liable to pay the adjudged penalty. After hearing both sides, the Tribunal observed that the appellant had indeed paid the Anti Dumping Duty and interest before the notice. The Tribunal noted that the penalty should have been 15% of the short levy duty, not 100% as confirmed by the department. Consequently, the Tribunal set aside the penalty amount confirmed in the adjudication order and allowed the appeal in favor of the appellant, holding them liable to pay a penalty of 15% of the adjudged duty amount.

The Tribunal distinguished a previous case cited by the appellant, emphasizing that in the present case, the appellant had correctly declared the country of origin, and the issue arose due to subsequent detection by the department. The judgment partially allowed the appeal in favor of the appellant, emphasizing the correct application of penalty provisions and the distinction in circumstances from the cited case.

In conclusion, the Tribunal's decision focused on the proper interpretation of the Customs Act provisions, particularly Section 28, regarding penalty imposition and recovery in cases of duty discrepancies. The judgment clarified the penalty amount applicable to the appellant and highlighted the importance of accurate declaration and compliance in import activities to avoid penalties and disputes.