Penalty Quantum u/s 114A for Misdeclared Fabric Consignment: CESTAT directs Reassessment in Customs Duty Dispute [Read Order]
The Tribunal held that the Adjudicating Authority had erred in imposing a combined penalty under multiple provisions of the Customs Act, 196.
The bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, remanded a dispute concerning penalty quantum under the Customs Act, 1962. The Tribunal held that the Adjudicating Authority had imposed a combined penalty without proper application of statutory provisions and directed reconsideration of penalty in accordance with law.
M/s. Roshan Overseas, the importer, had filed a Bill of Entry dated 10.04.2012 for 645 bales of fabric. The Commissioner of Customs, Tuticorin, through Order-in-Original No. 27/2014 dated 28.03.2014, found that the goods were misdeclared, misclassified and undervalued, attracting confiscation under Section 111(m) of the Customs Act, 1962.
The adjudicating authority redetermined the value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, assessed it at Rs.1,66,28,125/-, demanded a differential duty of Rs.86,24,294/-, and imposed a penalty of Rs.16,00,000/- under Sections 112(a)(v), 114A and 114AA of the Act.
Aggrieved by this, the Department appealed, seeking modification of the penalty quantum.
Represented by Anoop Singh, the Department argued that under Section 114A of the CustomsAct, 1962, penalty equivalent to the duty sought to be evaded is mandatory, and the Adjudicating Authority had no discretion to impose a lesser penalty.
It relied on Union of India v. Dharmendra Textile Processors (2008), holding that imposition of equivalent penalty sought to be evaded is mandatory.
The Department also contended that penalty under Sections 112 and 114A cannot be imposed in conjunction and must be applied exclusively due to the fifth proviso to Section 114A and argued that penalty under Section 114AA had not been adequately considered.
The Bench comprising Judicial Member, Ajayan T.V. and Technical Member, Vasa Seshagiri Rao, observed that the imposition of a combined penalty under Sections 112(a)(v), 114A, and 114AA by the Adjudicating Authority reflected non-application of mind, especially in view of the statutory bar on overlapping penalties.
The Bench held that penalties under these provisions are distinct and must be imposed with due regard to the facts and relevant judicial precedents.
Therefore, directing the Adjudicating Authority to reconsider the applicability and quantum of penalties afresh, while strictly adhering to the principles of natural justice.
Accordingly, the appeal was allowed by way of remand.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
