2015 (5) TMI 130 - AT - Customs

Tribunal overturns Ex-parte Order-in-Original, emphasizing fair procedure and correct penalty application in customs case

The Tribunal set aside the Ex-parte Order-in-Original against M/s. Nava Bharat Enterprises Ltd. under the Customs Act, noting the appellant's non-receipt ... Penalty under Section 114A of the Customs Act - liability of a non-importer/transferor of an Advance LicencePenalty under Section 114A of the Customs Act - liability of a non-importer/transferor of an Advance Licence - Whether a penalty under Section 114A can be imposed on the appellant who is not the importer but only the transferor of the Advance Licence. - HELD THAT: - The Tribunal examined the admitted facts recorded in the impugned order and the appellant's contention that they were not the importer but only the transferor of the Advance Licence. Having considered the rival contentions and the material on record, the Tribunal was satisfied that Section 114A, which contemplates levy of penalty on the importer, does not permit imposition of penalty on a party who is not the importer. On that basis the Tribunal set aside the impugned Order-in-Original insofar as it imposed penalty on the appellant. [Paras 4]Impugned order set aside so far as the appellant is concerned; appeal allowed; stay application disposed of.Final Conclusion: The appeal is allowed: the penalty imposed under Section 114A was not sustainable against the appellant, who was not the importer, and the impugned order is set aside in respect of the appellant. Issues:- Appeal against Ex-parte Order-in-Original- Non-receipt of show cause notice and Order-in-Original- Imposition of penalty under Section 114A of the Customs Act- Request for setting aside the impugned orderAnalysis:The appellant, M/s. Nava Bharat Enterprises Ltd., filed an appeal against the Ex-parte Order-in-Original dated 28.12.1998 issued by the Commissioner of Customs, JNCH, Nhava Sheva. The appellant claimed they did not receive the show cause notice or the Order-in-Original until a recovery notice was received on 13.11.2007. Subsequently, they obtained copies of the impugned order and show cause notice through an application under the Right to Information (RTI) Act. The Chief Information Officer confirmed the unavailability of certain documents related to the case.Regarding the penalty imposed under Section 114A of the Customs Act, the appellant argued that since they were not the importer but only the transferor of the Advance license, no penalty could be levied on them as per the provisions of Section 114A. The appellant requested the impugned order to be set aside concerning their involvement in the case.After hearing the arguments, the Tribunal noted that based on the admitted facts in the impugned order, no penalty could be imposed on the appellant as they were not the importer. Consequently, the Tribunal set aside the impugned order in relation to the appellant and disposed of the stay application. As a result, the appeal was allowed, favoring the appellant.This judgment highlights the importance of procedural fairness, the right to be heard, and the correct application of penalty provisions under the Customs Act. The Tribunal's decision to set aside the penalty imposed on the appellant showcases the adherence to legal principles and the protection of rights in customs matters.