Sri Ragavendra Traders vs CESTAT, Chennai

A. Selvam, J.—Challenge in this Civil Miscellaneous Appeal is to the Final Order, dated 19-5-2009 passed in Final Order No. 574 of 2009 in Appeal No. C/S/33/2009 and C/67/2009. The appellant herein has been engaging in doing aluminium scrap and liable to pay Customs duty. Under the said circumstances, a show cause notice has been issued whereby demanded Customs duty together with redemption fine and penalty and the same has been upheld in Order-in-Original. Against the order passed in Order-in-Original, an appeal has been preferred before the Commissioner of Appeals wherein both penalty and redemption fine are reduced. Against the order passed by the Commissioner of Appeals, an appeal has been preferred before the Appellate Tribunal wherein also some reductions with regard to redemption fine and penalty have been given. Against the order passed by the Appellate Tribunal, the present Civil Miscellaneous Appeal has been filed.

At the time of admitting the present Civil Miscellaneous Appeal, the following substantial questions of law have been settled for consideration:-

"(i) Whether the order of the first respondent was correct in law in substituting penalty on the appellant in excess of duty amount involved?

(ii) Whether the first respondent was justified in respect of redemption fine without considering demurrage charges?

(iii) Whether the order of the first respondent is justifiable in respect of orders of penalty imposed by lower authorities without considering the specific clause and Section under the Customs Act?"

The learned counsel appearing for the appellant has straightaway drawn the attention of the Court to the provision of 112(b)(ii) of the Customs Act, 1962, wherein it has been stated that a penalty can be imposed not exceeding the duty sought to be evaded on such goods or five thousand rupees whichever is the greater and in the instant case, penalty has been imposed more than the amount of duty and therefore, on the side of the assessee the same has been challenged, but the learned counsel appearing for the respondent has drawn the attention of the Court to three sub-sections viz., (iii) to (v) of Section 112(b) of the said Act.

From the cumulative reading of the said Section 112 clause (b) it is made clear that if there is any mis-declaration of goods as well as value, penalty can be imposed more than the value of goods and in the instant case, such things have had happened and therefore, the assessee cannot take shelter under clause (ii) of Section 112(b) of the said Act.

It is an admitted fact that only due to mis-declaration of goods as well as duty, the present proceeding has became emanated. Since the present proceeding has become emanated only due to mis-declaration of goods as well as duty, it is needless to say that Clause (ii) of Sub-Section (b) of 112 of the said Act is not applicable to the present case. The Department is entitled to impose penalty on the basis of Section 112(b)(v) of the said Act. Therefore, it is quite clear that the contention put forth on the side of the appellant/assessee is not legally acceptable and the substantial questions of law settled in the present Civil Miscellaneous Appeal are not having substance and altogether the present Civil Miscellaneous Appeal deserves to be dismissed. In fine, this Civil Miscellaneous Appeal deserves dismissal and accordingly is dismissed without costs and the Final order in question passed by the CESTAT is confirmed.