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2024 (1) TMI 532 - AT - CustomsLevy of penalty under Section 114A of Customs Act, 1962 - HELD THAT - Hon ble Supreme Court has in the case of UK ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE 2007 (11) TMI 27 - SUPREME COURT after taking the note of the provisions of Section 114A, observed A bare perusal of Section 114A makes it clear that the liability to pay penalty can be equal to the amount of duty and could not exceed the payable duty. Hence, the penalty imposed was against the express provisions of law. There are no merits in this appeal filed by the revenue - appeal dismissed.
Issues Involved:
1. Imposition of penalty u/s 114A of the Customs Act, 1962. 2. Interpretation of the term "or" in Section 114A. Summary: Issue 1: Imposition of penalty u/s 114A of the Customs Act, 1962. The appeal was filed by the Revenue challenging the penalty imposed under Section 114A, which was equivalent to the duty confirmed without including the interest portion. The Commissioner of Customs, Noida, in the Order-in-Original, confirmed various demands and imposed penalties accordingly. The Revenue's appeal relied on Board Circular No.61/2002-CUS dated 20th September 2002, which clarified that the penalty under Section 114A should be equal to the duty and interest thereon. Issue 2: Interpretation of the term "or" in Section 114A.The Tribunal considered the submissions and referred to the Board Circular and various judicial precedents. The Circular and the Ministry of Law's opinion indicated that the term "or" in Section 114A should be read as "and" to carry out the intention of the legislature. However, the Tribunal noted that several decisions, including those by the High Courts and the Supreme Court, have interpreted the term "or" as disjunctive, meaning the penalty should be equal to either the duty or the interest, not both. The Tribunal cited cases such as Styale Corporation, M/s Sony Sales Corporation, and U.K. Enterprises, which supported this interpretation. In conclusion, the Tribunal found no merit in the Revenue's appeal and dismissed it, affirming that the penalty under Section 114A should be equal to the duty confirmed, excluding the interest portion. (Dictated and pronounced in open court)
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