2011 (5) TMI 471 - AT - Customs

Tribunal overturns penalty on partner, rules against redemption fine. Firm's partners can't be penalized separately.

The Tribunal set aside the penalty imposed on the partner and the redemption fine, modifying the Order-in-Appeal. The Tribunal ruled that the redemption ... Imposition of redemption fine in lieu of confiscation - 100% EOU manufacturing polyester texturised yarn and polyester twisted yarn - Redemption fine is possible only in respect of goods seized and confiscated irrespective of the facts that the goods are available at the time of adjudication fir confiscation - Held that:- in this case, the goods were not physically seized and therefore, the question of confiscation and subsequent release on imposition of redemption fine do not arise - Decided in favour of assessee.Penalty - A partner is not a separate legal entity and cannot be equated with the employees of a firm - Once the firm has already been penalized, separate penalty cannot be imposed upon the partner - Decided in favour of assessee. Issues: Imposition of redemption fine in lieu of confiscation, Personal penalties on partnersIn this case, M/s Arihant Synthetics and an individual filed appeals against an Order-in-Appeal confirming customs duty and penalties for a shortage of imported polyester POY. The appellants argued that the redemption fine and personal penalties were harsh, and the demand was based on shortages without a real physical stock check. The main focus was on the redemption fine. The Tribunal analyzed the case details and precedent from a similar case. The Tribunal emphasized that redemption fine is applicable only to seized goods held liable for confiscation. Since the goods were not physically seized, the redemption fine could not be imposed. Additionally, the Tribunal referred to a High Court ruling stating that partners of a firm cannot be separately penalized if the firm has already been penalized. Therefore, the imposition of a penalty on the partner was deemed legally unsupported. Consequently, the Tribunal set aside the penalty on the partner and the redemption fine, modifying the Order-in-Appeal accordingly. Both appeals were disposed of in line with the Tribunal's findings.