Concurrent factual findings upheld on duty demand, but higher penalty could not be restored without a Revenue challenge.

In an appeal under section 35G, concurrent factual findings on alleged clandestine removal supported by statements and recovered records were not reappreciated, and the duty demand was left undisturbed because no substantial question of law arose. The Tribunal, however, exceeded its jurisdiction by restoring a higher penalty when the Revenue had not challenged the first appellate reduction; the assessee's appeal could not be used to enlarge the penalty. The restoration of the higher penalty was therefore set aside, and the penalty on the firm was deleted, while the duty demand remained confirmed.

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Issues: (i) Whether the duty demand based on the statements and recovered records could be interfered with in an appeal under section 35G; (ii) Whether the Tribunal was justified in restoring the higher penalty when the Revenue had not challenged the appellate reduction.

Issue (i): Whether the duty demand based on the statements and recovered records could be interfered with in an appeal under section 35G.

Analysis: The demand arose from alleged clandestine removal supported by contemporaneous records and statements. The first appellate authority had examined the evidence, including the retractions, and recorded detailed findings. In an appeal under section 35G, the Court does not act as a second appellate fact-finding forum and will not disturb concurrent factual conclusions unless a substantial question of law genuinely arises.

Conclusion: The duty demand was confirmed and no interference was called for.

Issue (ii): Whether the Tribunal was justified in restoring the higher penalty when the Revenue had not challenged the appellate reduction.

Analysis: The first appellate authority had reduced the penalty. Since the Revenue did not appeal against that relief, the assessee's appeal could not be used to enlarge the penalty. The Tribunal therefore exceeded its jurisdiction in restoring the penalty imposed by the original authority. Considering the nature of the trade and the surrounding circumstances, the penalty on the firm was also found liable to be set aside.

Conclusion: The restoration of the higher penalty was set aside and the penalty on the assessee-firm was deleted.

Final Conclusion: The appeal succeeded only on the penalty issue, while the duty demand remained undisturbed.

Ratio Decidendi: In an appeal under section 35G, concurrent factual findings on duty liability will ordinarily not be reappreciated, and a Tribunal cannot restore a higher penalty in the assessee's appeal when the Revenue has not challenged the appellate reduction.

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