2008 (12) TMI 461 - AT - Customs

Appellate tribunal affirms penalty under Customs Act for DEEC scheme breach, reduces penalty amount

The appellate tribunal upheld the imposition of a penalty under Section 112(b) of the Customs Act, 1962 on the appellant for contravening the DEEC scheme ... Penalty - Sub-clause of section imposing penalty not mentioned Issues:Penalty under Section 112(b) of the Customs Act, 1962 for contravention of DEEC scheme conditions.Analysis:The case involved the imposition of a penalty of Rs. 2 lakhs on the appellant under Section 112(b) of the Customs Act, 1962 for actively participating in the disposal of mulberry raw silk imported by M/s. Sree Vee Textiles in violation of the DEEC scheme and clearance conditions. The appellant accompanied a representative of M/s. Nandi Silks to Chennai for clearance and transportation of the goods, which were later handed over to a local buyer for disposal. The appellant contested the penalty on the grounds that the notice did not specify the sub-clause of Section 112 being contravened. However, the tribunal found the appellant was adequately informed of the charge, upholding the liability for penal action. Despite this, considering the overall circumstances, the tribunal reduced the penalty to Rs. 1,00,000.The appellant's main argument was the lack of specification in the notice regarding the sub-clause of Section 112 being contravened. The tribunal dismissed this argument, emphasizing that the appellant was sufficiently notified of the charge against them, thereby upholding the liability for the penalty. The tribunal noted that no other substantial arguments were presented by the appellant during the proceedings. Consequently, the tribunal decided to reduce the penalty from Rs. 2 lakhs to Rs. 1,00,000 after considering the entirety of the case and the facts presented. The decision to reduce the penalty was made based on the specific circumstances and the overall context of the case, leading to the partial allowance of the appeal.In conclusion, the appellate tribunal upheld the imposition of a penalty under Section 112(b) of the Customs Act, 1962 on the appellant for involvement in contravening the DEEC scheme conditions. Despite the appellant's argument regarding the specificity of the notice, the tribunal found the appellant adequately informed of the charge and liable for penal action. However, considering the totality of the facts and circumstances, the tribunal exercised discretion and reduced the penalty from Rs. 2 lakhs to Rs. 1,00,000, ultimately partially allowing the appeal.