2015 (9) TMI 510 - HC - Customs

Appeal dismissed due to separate penalties on firm and sole proprietor under Customs Act. Tribunal's decision upheld.

COMMISSIONER OF CUS., CSI AIRPORT, MUMBAI Versus GYANCHAND JAIN

The Court dismissed the appeal as the imposition of penalties separately on the firm/concern and the sole proprietor under Section 112(2) of the Customs ... Penalty imposed for improper importation of goods - Withdrawal of penalty - Whether Tribunal is right in law in setting aside penalty imposed under Section 112(2) of Customs Act, 1962 – Held that:- Once assessee is recognized as sole proprietorship concern, then, imposition of penalty on firm/concern or proprietorship concern and sole proprietor separately was not permissible in given facts and circumstances – Therefore, tribunal was justified in setting aside penalty upon sole proprietor-respondent while affirming penalty imposed upon company - In these state of affairs, we do not see that appeal raises any substantial question of law – Appeal dismissed – Decided against revenue. Issues:1. Imposition of penalty under Section 112(2) of the Customs Act, 1962.2. Applicability of penalty on sole proprietorship concern.3. Interpretation of law regarding imposition of penalty on firm/concern and sole proprietor separately.Analysis:1. The primary issue in this case revolved around the imposition of a penalty under Section 112(2) of the Customs Act, 1962. The appellant contended that a substantial question of law arose concerning the Tribunal's decision to set aside the penalty of Rs. 5,00,000 imposed on the respondent under this section. However, upon examination, the Court found that the penalty was actually imposed on the respondent-assessee under Section 112(a) of the Customs Act, 1962 by the Commissioner of Customs.2. The Court noted that the Tribunal had determined a penalty of Rs. 70,00,000 on the respondent proprietary concern, M/s. Vijaybhav, while a penalty of Rs. 5,00,000 was imposed on the sole proprietor, who was the respondent in the case. The Court emphasized that once the assessee was recognized as a sole proprietorship concern, the imposition of penalties separately on the firm/concern and the sole proprietor was not permissible under the circumstances. Therefore, the Court concluded that the appeal did not raise any substantial question of law, as the imposition of penalties separately was not legally justified.3. In the interpretation of the law regarding the imposition of penalties on firm/concern and sole proprietor separately, the Court held that in the given facts and circumstances, such separate imposition of penalties was not permissible. The Court dismissed the appeal on the grounds that the only point argued did not raise any substantial question of law that would enable the Court to entertain the appeal. Consequently, the appeal was dismissed, affirming the Tribunal's decision to set aside the penalty imposed on the respondent.