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TMI Blog2016 (4) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty - Section 114A of the Customs Act, 1962 - Held that:- the Show Cause Notice did not raise the demand in terms of Section 28 ibid. The wording of Section 114A ibid makes it expressely clear that penalty under that Section is attracted when liability to pay duty or interest is determined under Section 28 ibid. Thus, penalty under section 114A ibid is simply not attracted. Imposition of penalty - Section 112 of the Customs Act, 1962 - Held that:- by following the judgment of Delhi High Court in the case of CC (I&G) Vs. Care Foundation [2014 (3) TMI 641 - DELHI HIGH COURT], the penalty imposed on appellant no. 2 should be reduced in the same ratio to ₹ 1 lakh. As regards penalty on Mr. Bhuvander Kaul, it is clearly brought out in the impugned order that he was the one looking after the import of the said equipment and that he was having knowledge of the mis-declaration and was a part of the entire plan to mis-declare the impugned goods. Thus, penalty on him is attracted. But in the given circumstances and having regard to the fact that penalty on M/s. J. Mitra & Bros, (who was also aware of the mis-declaration and was part of the plan to mis-declare the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 3,47,63,531/- on M/s. Escorts Heart Institutes Research Centre was imposed for mis-declaration of the impugned goods under Section 114A ibid. However, further penalty under Section 112 ibid was not imposed. (vi) Penalty of ₹ 3 lakhs under Section 112(a) ibid was imposed on Shri Bhuvander Kaul, Dy. General Manager (Medical Materials) of M/s. Escorts for his active role in mis-declaration of the description of the impugned goods. (vii) Penalty of ₹ 5 lakhs under Section 112(a) ibid was imposed on M/s. J Mitra Bros was imposed for its active role in the mis-declaration of the description of the impugned goods. (viii) Penalty of ₹ 1 lakh under Section 112(a) ibid was imposed on M/s. Elecon Cargo Agency, the CHA was imposed for its active role in mis-declaration of the description of the impugned goods. 2. The facts of the case, briefly stated, are as under:-The appellant M/S Escorts Heart Institute and Research Centre (hereinafter referred to as appellant No. 1) filed a Bill of Entry dated 28.10.2002 through its CHA M/s. Elecon Cargo Agency for the goods declared as IS 1000 fibre-optic endoscope surgical system classifying the same under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces in the case of similar imports by Care Foundation, after taking into account similar contentions, the penalty upon it had been upheld by CESTAT which was further upheld by Delhi High Court vide order dated 11.10.2013 except that the Delhi High Court reduced the penalty from 25 to ₹ 5 lakhs. Following the same ratio, the appellant pleaded that the penalty of ₹ 5 lakhs imposed upon it vide impugned order should be reduced to ₹ 1 lakh. 5. Ld. advocate for the CHA (appellant No. 3) strenuously argued that it had no role in the mis-declaration of the impugned goods and had faithfully prepared and submitted the documents to Customs based upon the documents it received from appellant No. 1. It also stated that it had duly enclosed the invoice which showed the description of the goods as given by the supplier and therefore it could not be held guilty of any abetment. He cited a few judgements in support of this proposition which will be referred to later. 6. Per contra, Ld. Departmental Representative stated that the demand was in effect confirmed under Section 28 ibid and therefore interest was clearly leviable under Section 28 AB ibid on the impugned different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice does not mention Section 28 of the Customs Act, 1962 even in passing. The Show Cause Notice also does not mention as to under what provisions of law, the interest was sought to be recovered although the impugned order confirms interest under provisions of Section 28AB ibid. Perusal of Section 28 AB ibid as it existed during the relevant period leaves no scope for ambiguity that the interest thereunder is chargeable only when the demand has been confirmed under provisions of section 28 ibid. Even if it is considered that the demand arises out of finalisation of provisional assessment in terms of Section 18 ibid, it has been settled by judicial pronouncements that no interest is recoverable on finalisation of provisional assessments made prior to 13.07.2006 when the provision for interest liability were introduced in Section 18 ibid by inserting Section 18 (3) even if the finalisation of assessment took place after 13.07.2006. In the case of the Sterlite Industries Vs. C.C., [2008 (223) ELT 633 (Tri -Chennai)] it was held that no interest is payable on the differential duty determined on finalisation of provisional assessment made prior to 13.7.2006 even if such finalisation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nager (Medical Materials), it is clearly brought out in the impugned order that he was the one looking after the import of the said equipment and that he was having knowledge of the mis-declaration and was a part of the entire plan to mis-declare the impugned goods. Thus, penalty on him is attracted. But in the given circumstances and having regard to the fact that penalty on M/s. J. Mitra Bros, (who was also aware of the mis-declaration and was part of the plan to mis-declare the impugned goods) has been reduced by us from ₹ 5 lakhs to ₹ 1 lakh for reasons given in preceding para, we are inclined to follow the same principle in the case of Mr. Bhuvander Kaul also. 11. As regards the penalty on the CHA, (M/s Elecon Cargo Pvt. Ltd.) we find that it filed a Bill of Entry on the basis of the documents made available to it by the importer and it had duly enclosed the supplier' s invoice which described the goods as Endoscopic Intuitive IS 1000 da Vinci Surgical System . There is nothing on record to show that the CHA was deliberately trying to mislead Customs or was having any mala fide. The very fact that the relevant invoice was duly enclosed along with the Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X
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