2023 (12) TMI 613 - AT - Customs

Company penalized Rs.14,97,179 under Section 114A for mis-declaring assessable value causing duty short-payment

M/s. Woodtech Consultants Private Limited Versus Commissioner of Customs (Appeals) Bangalore, Shri T. Gopi, Managing Director M/s. Woodtech Consultants Private Limited Versus Commissioner of Customs (Appeals), Bangalore And Shri D. Madan Raj, Marketing Director M/s. Woodtech Consultants Private Limited Versus Commissioner of Customs (Appeals), Bangalore

CESTAT Bangalore upheld penalty under Section 114A of Customs Act, 1962 equivalent to duty short-paid of Rs.14,97,179 against appellant company for ... Imposition of penalty u/s 114A of the Customs Act, 1962 equivalent to the duty short-paid - personal penalty of other appellants under Section 112(b) of the Customs Act, 1962 - tax amount has been paid with interest before issuance of show-cause notice - HELD THAT:- The mis-declaration of the assessable value by the appellant resulted into short-payment of Rs.14,97,179/-, hence imposition of penalty equivalent to the said differential duty of Rs.14,97,179/- under Section 114A of the Customs Act, 1962 on the appellant is justified. There are no error of facts or in application of law in arriving at the said conclusion by the learned Commissioner when the allegation of gross undervaluation of the product and transferring the suppressed amount later through non-banking channels have been accepted in the statements of the Managing Director and other persons of the appellant-company; consequently, the penalty imposed on the appellant-company is hereby upheld. There are no reason to interfere with the findings of the learned Commissioner on the personal penalties imposed on each of other appellants who were actively involved in the gross undervaluation. However, considering the gravity of offence committed and the facts and circumstances of the case, the penalty imposed on Shri T. Gopi, Managing Director is reduced to Rs.2,00,000/- (Rupees Two Lakhs Only) and the penalty imposed on Shri D. Madan Raj, Marketing Director is reduced to Rs.1,00,000/- (Rupees One Lakh Only) under Section 112(b) of the Customs Act, 1962 to meet the ends of justice. The appeal filed by the appellant-company is dismissed and the appeals of other appellants are partially allowed. Issues Involved:- Imposition of penalty on the appellant under Section 114A of the Customs Act, 1962- Imposition of personal penalties on other appellants under Section 112(b) of the Customs Act, 1962Summary:The case involved the import of wood working machines with allegations of under-invoicing and transfer of excess amounts to overseas suppliers through non-banking channels. The appellant did not challenge the payment of differential duty but contested the imposition of penalties. The Revenue argued that penalties were justified due to deliberate misdeclaration and fraudulent actions. The main issue was whether penalties were rightly imposed on the appellant and other appellants. The Commissioner confirmed the allegations, stating that the appellant suppressed the correct value of imported goods, leading to underpayment of duty. The penalties were upheld based on the findings of deliberate fraud and intention to evade duty. The penalties on other appellants were also upheld, with adjustments made based on the gravity of the offense. The appeal by the appellant-company was dismissed, while the appeals of other appellants were partially allowed with reduced penalties to meet the ends of justice.