Director's Personal Penalty Appeal Dismissed - Lack of Involvement

The Appellate Tribunal CESTAT AHMEDABAD dismissed the appeal by M/s. Cymex Time Ltd. against the imposition of a personal penalty of Rs. 10 lakhs on the Director under Section 112(a) of the Customs Act, 1962. The Tribunal found no evidence of personal involvement or knowledge of the Director in the actions leading to the penalty, leading to the penalty being set aside and the appeal allowed with consequential relief.

---

---

Issues involved: Imposition of personal penalty under Section 112(a) of the Customs Act, 1962 on the Director of M/s. Cymex Time Ltd.

Summary:
The Appellate Tribunal CESTAT AHMEDABAD addressed the challenge in the present appeal regarding the imposition of a personal penalty of Rs. 10 lakhs on the appellant, who is the Director of M/s. Cymex Time Ltd., under Section 112(a) of the Customs Act, 1962. The Tribunal dismissed the appeal filed by M/s. Cymex Time Ltd. against the confirmation of demand due to non-compliance with the stay order.

Upon hearing both sides and reviewing the impugned order, the Tribunal referred to a previous case law where it was established that the imposition of a penalty on a company for mens rea under Section 114A does not automatically lead to the penalization of its Managing Director under Section 112(a) of the Customs Act. It was emphasized that unless there is evidence of personal involvement of the Managing Director in the actions leading to the penalty, they cannot be penalized. In the present case, the Tribunal found no role attributable to the appellant that would indicate personal knowledge or involvement.

Therefore, the Tribunal set aside the penalty imposed on the appellant and allowed the appeal with consequential relief to him.

(Dictated and pronounced in Court)

---