The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under section 117 of the Customs Act,1962 on the grounds of the absence of direct evidence of connivance.
P. Sinnamani, the appellant assessee appealed against the order passed by the Commissioner of Customs (Preventive) against 12 co-notices wherein he has inter alia imposed a penalty of Rs.4,00,000/- (Rupees Four Lakhs only) under Section 117 of the Customs Act.
During the hearing of the appeal, none appeared on behalf of the assessee and Rudra Pratap Singh appeared for the department.
The counsel for the department relied on the decisions made by the lower authorities and contended that the penalty imposed against the assessee was as per the law and liable to be sustained.
The Bench observed that that there was no evidence to allege that the assessee therein had connived in any manner, in the overvaluation of the goods imported and Section 117 of the Customs Act invited penalty for contravention, etc., of any provision of the Act or abets any such contravention or who fails to comply with any of the provisions of the Act.
The two-member bench comprising P Dinesha (Judicial) and Ajit Kumar (Technical) held that the penalty imposed against the assessee was not legally sustainable and liable to be quashed while allowing the appeal filed by the assessee.
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