2021 (12) TMI 492 - AT - Customs

Levy of penalty u/s 114A of Customs Act, 1962 - for transfer of the matter to the Single Member Bench - Absolute confiscation - assessment of duty - HELD THAT - Sub-section (4) of Section 17 provides that if the assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, reassess the duty on the goods. It is expressly and specifically stated in sub-section (4) that the reassessment under Section 17 is without prejudice to any other action which may be taken under the Act. When there is suppression of facts in the nature of undeclared goods and misdeclared goods , the demand of duty consequent to the confiscation made under Section 28 (4), is valid and proper. In the present case, the appellant has been allowed to redeem the goods on payment of payment of duty. The appellant has later at the time of hearing of the appeal opted to abandon the goods. This does not in any way absolve the allegations of misdeclarations confirmed and upheld by the impugned order. The appellant imported prohibited goods which were absolutely confiscated. The goods which were allowed to be redeemed were also found to be undeclared / misdeclared for which penalty is imposable under Section 114A of the Customs Act. There are no grounds to interfere with the penalty imposed under Section 114A of the Customs Act, 1962 - appeal dismissed.

Summary

Issues:
1. Contesting penalty imposed under Section 114A of Customs Act, 1962.

Analysis:
The appellant contested only the penalty imposed under Section 114A of the Customs Act, 1962, and not issues related to valuation or confiscation. The Division Bench transferred the matter to the Single Member Bench based on the appellant's submission. The appellant's counsel argued that duty demand under Section 28 (4) cannot be sustained if the goods are not cleared, and therefore, the penalty under Section 114A should also be set aside. The counsel relied on the decision of the Hon'ble Supreme Court to support the argument that show cause notice under Section 28 can only be issued after goods are cleared under Section 47 of the Customs Act, 1962.

2. Confiscation and penalty imposition based on undeclared goods.

The Revenue argued that undeclared goods were found during examination, leading to the confiscation of prohibited goods and imposition of a penalty under Section 114A. The appellant's abandonment of the goods after the confiscation, duty, and penalty orders does not absolve them of the infractions committed. The Revenue contended that Section 28 can be invoked in cases of suppression of facts, and the demand raised under Section 28 (4) is proper. The appellant's argument that reassessment should be done under Section 17 (5) was deemed inapplicable due to willful suppression and misdeclaration of goods.

3. Interpretation of Sections 17 and 28 of the Customs Act, 1962.

The Tribunal analyzed the provisions of Sections 17 and 28 of the Customs Act, 1962, to determine the legality of the duty demand and penalty imposition. The Tribunal clarified that reassessment under Section 17 (4) is valid even in cases of suppression of facts, such as undeclared and misdeclared goods. The Tribunal also referenced a previous Supreme Court judgment to support the interpretation that show cause notices under Sections 28 and 124 can be issued independently of other orders.

4. Upholding penalty under Section 114A.

After considering the arguments presented by both sides, the Tribunal upheld the penalty imposed under Section 114A of the Customs Act, 1962. The Tribunal found no grounds to interfere with the penalty and, consequently, dismissed the appeal. The impugned order was upheld, and the decision was pronounced in open court on 10.12.2021.