Tribunal overturns penalty under Customs Act due to payment; Appeal allowed with relief

The Tribunal set aside the penalty imposed on the appellant under Section 112(b)(ii) of the Customs Act, 1962, as the main party had paid the duty, interest, and penalty. Relying on the decision in Gautam Pukhraj Bafna case, the Tribunal found that the penalty against the co-appellant was not sustainable, leading to the allowance of the appeal with consequential relief. The cross objection was also disposed of accordingly.

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Issues:
Penalty under Section 112(b)(ii) of the Customs Act, 1962 imposed on the appellant.

Analysis:
The appellant appealed against an order imposing a penalty under Section 112(b)(ii) of the Customs Act, 1962. The case involved M/s Duflon Industries Pvt. Ltd. importing PTFE Resin Grade 669 without paying Anti-Dumping duty. While M/s Duflon Industries Pvt. Ltd. paid the duty, interest, and 15% penalty, the penalty against the appellant was confirmed. The appellant argued that as per Explanation 3 to Section 28 of the Customs Act, if the main party pays the duty, interest, and penalty, the proceedings against the co-appellant are not sustainable. The appellant relied on the decision in Gautam Pukhraj Bafna Vs Commissioner of Customs, Mumbai. On the other hand, the Department argued that the penalty on the co-appellant was justified as they were co-appellants. They referred to the decision in Yogesh Korani Vs. Union of India, affirmed by the Hon'ble Apex Court.

The Tribunal considered both arguments. It noted that the decision in Yogesh Korani case was not relevant to the present case. The appellant's reliance on the Gautam Pukhraj Bafna case was examined, where it was observed that if duty, interest, and penalty are paid within 30 days of the show-cause notice (SCN), the SCN is not sustainable. As the main party had paid the duty, interest, and penalty, the proceedings against the co-appellant could not be sustained. Therefore, the impugned order imposing a penalty on the appellant was set aside, and the appeal was allowed with consequential relief. The cross objection was also disposed of accordingly.

In conclusion, the Tribunal found that as the main party had paid the duty, interest, and penalty, the penalty against the co-appellant was not justified. The decision in Gautam Pukhraj Bafna case was crucial in determining that the proceedings against the co-appellant were not sustainable, leading to the setting aside of the penalty imposed on the appellant.

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