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TMI Blog2023 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... he value as declared or to the value as determined under the Customs Act. It is not the case that penalties imposed under the provisions is a mandatory penalty that needs to be reduced. Commissioner (Appeals) in exercise of discretion have reduced the penalties imposed as indicated in his order. Nothing has been stated in the appeal to show that the discretion as exercised was in a malafide manner. In case of COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI VERSUS RA SPINNING MILLS (P) LTD. [ 2004 (4) TMI 405 - CESTAT, MUMBAI] Mumbai bench held Section 112 of the Customs Act does not provide for a mandatory penalty and the discretion to impose penalty or not to impose penalty depends upon each case. In COMMISSIONER OF CENTRAL EXCISE, CUS. S.T. VERSUS BARNWAL CARPET MFG. CO. [ 2017 (11) TMI 1046 - ALLAHABAD HIGH COURT] Hon ble Allahabad High Court has held When the adjudicating authority is empowered to impose lesser penalty than the maximum provided it cannot be said that the Tribunal is not vested with the same power. The Tribunal having exercised the above discretion for the reasons recorded which do not appear to be arbitrary or whimsical, in any way, we are of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty imposed upon the appellant-I is reduced to Rs. 3,00,000/-(Rupees three lakhs only). 10. The adjudicating authority has also imposed a penalty of Rs.30,00,000/- on the appellant- 1 under Section 114AA of the Act by stating that the appellant in collusion with his DTA supplier (appellant-2) attempted to export the impugned goods which were liable for confiscation and knowingly made false declarations in the shipping bills, invoices etc. in contravention of provisions of Section 50 (2) of the Act with an intent to claim irregular/fraudulent export incentives. In this regard, I find that penalty under Section 114AA of the Act can be imposed only if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of the Act. However, I find that nowhere in the SCN or in the impugned order has it been brought out that the mis-declaration of the goods was done as per the instructions of Shri Zia Faisal or Shri Mohd Faheem and that they knowingly signed the documents. Shri Zia Faisal from the very beg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the impugned goods which were found to be mis- declared and therefore liable for confiscation. None of the ingredients mentioned in the said Section 114 of the Act are satisfied as far as appellant-2 is concerned. Therefore, no penalty under Section 114 of the Act is imposable on the appellant-2. The penalty imposed under Section 114 of the Act is, therefore, set aside. Hon'ble CESTAT, Mumbai, in the case of S.P. Bahl Vs Commissioner of Customs (Import), Mumbai, as reported in 2015 (319) E.L.T. 157, has held as under: Penalty - Misdeclaration - Goods supplied by appellants to exporter only in domestic area i.e. out of Customs area - No document prepared by appellant or signed by him relevant to export of goods - Appellant not found to be involved in export of goods - Charges based solely on statement of exporter without any corroboration - Goods not liable to confiscation - Penalty not imposable on appellant under Section 114(1) or Section 114AA of Customs Act, 1962. 11.1 As regards penalty Rs 15,00,000/- imposed on the appellant-2 under Section 114AA of the Act, it has been discussed in para 10 above that the same is imposable only on a natural person and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, attempted to be exported vide six(6) Shipping Bills bearing No.4001397, 4001398 and 4001399 all dated 19.09.2017 and 4001394, 4001395 and 4001396 all dated 19.09.2017, declared by the Exporter in terms of Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 and re-determine the same to Rs.6,87,124/- (Rupees Six Lakh Eighty Seven Thousand One Hundred and Twenty Four only), on the basis of market enquiry conducted by the officers of CIU along with the representative of the Exporter, in terms of the provisions of Rules 3 6 of Customs Valuation (Determination of Value of Export Goods) Rules, 2007. (iii) I hereby confiscate the goods attempted to be exported vide six (6) Shipping Bills baring No. 4001397, 4001398 and 4001399 all dated 19.09.2017 and 4001394, 4001395 and 4001396 all dated 19.09.2017 having declared the FOB value of Rs.4,52,34,578/- re- determined value of Rs. 6,87,124/- respectively and seized on 26.09.2017 under the provisions of Section 113(h), 113(i) and 113(ia) of the Customs Act, 1962. I give the option to M/s Amrut Handicrafts, M-1, Pocket-B, SEZ-Moradabad to redeem the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff area supplier with intent to avail fraudulent drawback and benefit of MEIS scheme. The exporter's acknowledgment that the mis-declaration of goods was occurred due to mistake of the persons responsible for the packing, is not acceptable as there is huge difference in quantity of goods stuffed in containers and as declared in documents and as these kinds of consignment cannot be stuffed without any supervision or planning. In view of the above, it appears that the exporter has intentionally and knowingly mis-declared the goods to getting the benefit of export incentives of MEIS scheme and Duty drawback. 4.3 With regards to respondent-II the grounds stated is as follows:- With regard to penalty amounting to Rs. Thirty lakhs upon Appellant-2, under Section 114(ii), the Commissioner (Appeals) finds that no penalty is imposable on the Appellant-2 under this section as nowhere in the SCN or the impugned order has it been brought out that appellant-I and appellant-2 had any prior understanding to supply and ship the impugned goods which they intentionally and knowingly mis-declared, therefore, Appellant-2 is not guilty of any act or omission in respect of the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents guilty of mis-declaration etc. and imposition of penalties under Section 114 and specifically under Section 114AA is a discretionary power whereby penalty could have been imposed up to the value as declared or to the value as determined under the Customs Act. It is not the case that penalties imposed under the provisions is a mandatory penalty that needs to be reduced. Commissioner (Appeals) in exercise of discretion have reduced the penalties imposed as indicated in his order. Nothing has been stated in the appeal to show that the discretion as exercised was in a malafide manner. 4.5 In case of R A Spinning Mills [2004 (171) E.L.T. 54 (Tri. Mumbai)] Mumbai bench held as follows: 7. As regards the issue as to whether penalty should have been imposed, we find that it has been held in series of decisions including that in the case of Wooltex Associates v. CC, Mumbai [1998 (99) E.L.T. 245] that Section 112 of the Customs Act does not provide for a mandatory penalty and the discretion to impose penalty or not to impose penalty depends upon each case. In the case of Akbar Badruddin Jiwani v. CC [1990 (47) E.L.T. 161 (S.C.)], penalty imposed under Section 112 was set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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