2018 (4) TMI 852 - AT - Customs

Tribunal sets aside penalty under Customs Act due to absence of duty demand confirmation

The Tribunal set aside the penalty imposed on the Director of M/s. Andslite Pvt. Ltd. under Section 112(b) of the Customs Act, 1962, as the duty demand ... Imposition of penalty under Section 112(b) of the Customs Act, 1962 - liability of director for penalty where adjudged demand against company is set aside - effect of setting aside adjudication order on consequential penaltiesImposition of penalty under Section 112(b) of the Customs Act, 1962 - liability of director for penalty where adjudged demand against company is set aside - Whether penalty imposed on the director can be sustained when the adjudication order confirming duty demand against the company has been set aside and upheld in appeal. - HELD THAT: - The Tribunal found that the adjudication order confirming the duty demand against M/s. Andslite Pvt. Ltd. was set aside by the Commissioner of Customs and that order was subsequently upheld by the Tribunal in Revenue's appeal. In view of the principal adjudication being set aside, there is no justification to sustain the penalty imposed on the director of the company. The impugned order upholding the penalty therefore lacked merit and was set aside.Impugned order upholding penalty on the director is set aside and the appeal is allowed.Final Conclusion: The Tribunal allowed the appeal, set aside the order upholding the penalty against the director, and quashed the penalty since the adjudication confirming duty demand against the company had been set aside and that order was sustained on appeal. Issues: Imposition of penalty under Section 112(b) of the Customs Act, 1962 for non-fulfillment of conditions of notification no. 12/2012-CE dated 17.03.2012.Analysis:1. The case involved the imposition of a penalty under Section 112(b) of the Customs Act, 1962 for non-fulfillment of the conditions of notification no. 12/2012-CE dated 17.03.2012. The Original Authority had proceeded against M/s. Andslite Pvt. Ltd. and its Director for confirmation of duty demand and imposition of penalties. The Commissioner (Appeals) set aside the adjudication order confirming the duty demand in favor of M/s. Andslite Pvt. Ltd. However, the penalty imposed on the Director was upheld in the impugned order dated 17.02.2014.2. The Tribunal considered the appeal and noted that the adjudication order confirming the duty demand against M/s. Andslite Pvt. Ltd. had been set aside by the Commissioner and upheld by the Tribunal in a previous Final Order. Since the demand against the company had been set aside, the Tribunal found no justification for imposing a penalty on the Director of the company.3. After hearing both sides, the Tribunal concluded that there was no merit in the impugned order. Therefore, the Tribunal set aside the order and allowed the appeal in favor of the appellant, the Director of M/s. Andslite Pvt. Ltd. The Tribunal's decision was based on the lack of justification for imposing a penalty when the demand against the company had already been set aside.4. In the final judgment, the Tribunal pronounced the decision in the open court, setting aside the impugned order and allowing the appeal in favor of the appellant, the Director of M/s. Andslite Pvt. Ltd. The Tribunal's decision was based on the lack of merit in upholding the penalty when the demand against the company had been set aside.