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TMI Blog2024 (12) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty u/s 114A of the Customs Act, 1962 - HELD THAT:- Section 114A deals with situations of intentionally making or using any declaration, statement or document which is false or incorrect in the transaction of any business for the purpose of Customs Act, 1962. The said Section is intended to penalize situation where there are paper transaction without any actual import or export of goods. In the present case, the revenue department has no case that the transaction was a paper transaction and that no goods were imported by the Appellant and therefore, we hold that penalty under Section 114A is not attracted. Penalty imposed on the partners of the Appellant firm - HELD THAT:- The same is not sustainable for the reason that the penalty was proposed to be imposed on the Appellant partnership firm. Reliance placed on the decision of Hon ble Gujarat High Court in case of CCE Vs. Jai Prakash Motwani [ 2009 (1) TMI 501 - GUJARAT HIGH COURT] wherein it is observed that ' Admittedly, a partner is not a separate legal entity and cannot be equated with the employees of a firm. Once the firm has already been penalized, separate penalty cannot be imposed upon the partner. The impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers reiterated the fact that they had never placed any order for purchase of areca nuts and order was placed only for raw cashew nuts. It was also reiterated that due to the mistake by the supplier as admitted by the supplier the areca nuts were supplied. 7. However, the above investigation culminated into issuance of the show cause notice having number F. No. VIII/10-06/Commr./O A/202-24/1534 dated 07.06.2023. 8. However, the demand of duty and penalty as raised in the show cause notice dated 07.06.2023 was confirmed in the impugned Order in Original dated 28.03.2024 wherein the goods were also absolutely confiscated. 9. We have heard Ld. Advocate Shri Paritosh Gupta for the Appellants and Shri Girish Nair, Ld. Assistant Commissioner and Authorized Representative of the Revenue Department. We have also considered the submissions made by both the sides. 10. We find that it is undisputed fact in the present case that the goods (areca nuts) are absolutely confiscated by the revenue authorities. In such circumstances, the demand of duty on the Appellants is not sustainable. We find that the similar question arose before the Division Bench of this tribunal in case of Maiden Trading Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hibition imposed by or under this Act or any other law for the time being in force; (m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54; (n) any dutiable or prohibited goods transisted with or without transhipment or attempted to be so transited in contravention of the provisions of Chapter VIII; (o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened.] On analysing the above provisions, we find that from a plain reading of provisions of sub-section (n) and (o), it is clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first occasion for an importer to declare or misdeclare particulars of the goods imported by him is at the stage of filing Bill of Entry. He cannot be held liable for any misstatement of particulars in Bill of Lading or Import manifest. Hence, as rightly contended by the appellants, the finding of misdeclaration against them is untenable. In this case, the investigating agency (DRI) also ventured into an inquiry as to what should be the assessable value of the goods and as to whether the importer had misdeclared the value of the goods. The importer never filed any Bill of Entry declaring the value and other particulars of the goods. Hence it is absurd for the DRI to have ventured to such an exercise. Surprisingly, this absurdity was sustained by learned Commissioner in the impugned order. 13. We further find that only ground for imposing penalty in this case by the adjudicating authority that the appellant was having the modus operandi and have placed the order on the supplier of the goods but no efforts were made to ascertain the fact that whether the appellant has placed the purchase order on the supplier of the goods or not? Moreover, when the Manager of the appellant was cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared quantity as well as quantity of the imported goods. The abandonment under Section 23(2) can be applied only in any bona fide case, where the importer relinquishes the imported goods in the normal course of business. The department seeks restoration of the order of the Additional Commissioner. 8. Section 23(2) of the Customs Act reads as follows: - The owner of any imported goods may at any time before an order for clearance of the goods for home consumption under Section 47 of an order for permitting the deposit of goods in a warehouse under Section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. 9. The right of the importer to abandon the goods at any time before the order for clearances of the goods for home consumption under Section 47 is unconditional. Therefore, the Commissioner s (Appeals) decision in permitting the abandonment and setting aside the demand is legal. Even in cases where the goods are held liable for confiscation and redemption is offered on payment of fine and if a importer does not choose to exercise the option, naturally the ownership of the goods rest with the Central Government and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of exemption notification as held in Collector of Central Excise v. H.M.M. Limited, 1995 (76) E.L.T. 497 (S.C.) and CCE, Aurangabad v. Balakrishna Industries, 2006 (201) E.L.T. 325 (S.C.). However, we find that the appellants have been giving various declarations about the impugned goods while making export from Delhi and while importing at Bangalore. Only after the issue of notification, they have raised the issue of interpretation of notification. Therefore, we find that the appellant s contention is not valid. The appellants also contended that the penalty under the Section 114AA can be imposed when the goods have been exported by forging the documents knowingly or intentionally. The present case does not relate to export at all and even for imports, all the documents presented for imports were genuine and not forged and thus penalty is not imposable under Section 114AA of the Customs Act, 1962. We find that there is merit in the argument of the appellants. As the case is not of export, we find that no penalty under Section 114AA of the Customs Act, 1962 is imposable. The appellants have also relied upon the case of Bussa Overseas Properties P. Ltd. v. C.L. Mahar, Assista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al question of law, the appeal is dismissed. 15. Similar proposition was laid down by Hon ble Punjab Haryana High Court in case of Vinod Kumar Gupta Vs. CCE reported in 2013 (287) ELT 54 (P H) wherein it is observed as under: 9. Having heard learned counsel for the parties, we are of the considered opinion that proprietorship firm or proprietor thereof cannot be treated as two different legal entities. Partnership firm is a firm in mercantile usage, however, penalty imposed on the proprietorship or partnership firms would mean penalty on the proprietor or partners thereof, therefore, imposition of penalties one on the proprietorship firm and second on the proprietor would amount to imposition of penalty twice, which cannot be sustained in the eyes of law. 10. Learned Single Judge of Calcutta High Court in the case of TarakNath Sen and Others v. Union of India and Others, AIR 1975 Calcutta 337, has observed as under :- 17. Thus, these decisions make it clear that although a firm in mercantile usage has a personality of its own, strictly in the eye of law, it is not a legal entity like a natural person. Therefore, the rights and obligations of a firm are really rights and obligations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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