Tribunal Upholds Penalties for Illicit Import: Duty Confirmed, Precedent Cited The Commissioner confirmed a duty of Rs. 1,04,997 on appellants for illicitly removing imported goods. The Tribunal imposed a penalty equal to the ...
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Tribunal Upholds Penalties for Illicit Import: Duty Confirmed, Precedent Cited
The Commissioner confirmed a duty of Rs. 1,04,997 on appellants for illicitly removing imported goods. The Tribunal imposed a penalty equal to the confirmed duty on M/s. Akash Fabrics under Section 114A of the Customs Act, 1962, citing precedent from the Supreme Court. Additionally, a penalty of Rs. 10,000 was imposed on the partner of M/s. Akash Fabrics for his involvement in the illicit removal. Both appeals were rejected, affirming the penalties imposed on the appellants and the partner.
Issues involved: Confirmation of duty on illicit removal of imported goods, imposition of penalty under Section 114A of the Customs Act, 1962, imposition of penalty on the partner.
Confirmation of duty on illicit removal of imported goods: The Commissioner confirmed the demand of duty Rs. 1,04,997/- on the appellants for the illicit removal of POY imported by them and cleared in DTA instead of using the same. The appellants did not dispute the diversion of imported raw material in the domestic market and the consequent duty liability, which was upheld. The entire duty was deposited by the appellants during the investigation.
Imposition of penalty under Section 114A of the Customs Act, 1962: A penalty of identical amount as the duty confirmed was imposed on M/s. Akash Fabrics, in accordance with Section 114A of the Act. The Tribunal referred to the interpretation of similar provisions under Section 11AC of the Central Excise Act by the Hon'ble Supreme Court in the case of Dharamendra Textile Processors, which held that there is no discretion to reduce the penalty when the law mandates a penalty equal to the duty confirmed. Since Section 11AC and Section 114A are similar, the Tribunal found no reason to interfere with the penalty imposed on M/s. Akash Fabrics.
Imposition of penalty on the partner: Shri Jayprakash Motwani, a partner of M/s. Akash Fabrics, confessed to the illicit removal of POY in his statement. The authorities determined that he had knowledge of and actively participated in the illicit removal, justifying the penalty of Rs. 10,000/- imposed on him.
Conclusion: Both appeals were rejected, and the penalties imposed on the appellants and the partner were upheld.
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