2024 (2) TMI 1276 - HC - Customs

Penalty Quashed for Exceeding Customs Act Limit; Case Remanded for Fair Reconsideration within Six Weeks.

The HC quashed the impugned order partially, finding the petitioner was denied a reasonable opportunity to be heard and that the penalty of Rs. 5,00,000/- ... Penalty imposed u/s 117 - handling agent in respect of the import of goods - HELD THAT:- Undoubtedly, the petitioner was not provided a reasonable opportunity. In addition, on examining Section 117 of the Customs Act, I find that the sum of Rs. 4,00,000/- is the ceiling with regard to imposition of penalty, whereas, in the impugned order, a penalty of Rs. 5,00,000/- was imposed u/s 117. This is clearly unsustainable. Thus, the impugned order is quashed in so far as it imposes a penalty on the petitioner. As a corollary, the matter is remanded for reconsideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, a fresh order shall be issued in respect of the petitioner within a maximum period of six weeks from the date of receipt of a copy of this order. W.P.No.4398 of 2024 is disposed of on the above terms. There will be no order as to costs. Consequently, W.M.P.No.4738 of 2024 is closed. Issues involved:The petitioner challenges an Order-In-Original imposing a penalty of Rs. 5,00,000/- under Section 117 of the Customs Act, 1962, alleging denial of a reasonable opportunity of being heard and exceeding the maximum penalty limit.Detailed Summary:Issue 1: Denial of reasonable opportunity of being heardThe petitioner, a customs handling agent, received a hearing notice after the scheduled time of hearing and requested rescheduling. Despite the petitioner's efforts to adjust the hearing date, the impugned order imposing a penalty of Rs. 5,00,000/- was issued on 05.01.2024. The petitioner argued that he was denied a reasonable opportunity of being heard, as guaranteed under Section 117 of the Customs Act.Issue 2: Imposition of penalty exceeding statutory limitThe petitioner's counsel highlighted that the maximum penalty under Section 117 of the Customs Act is Rs. 4,00,000/-. However, the impugned order imposed a penalty of Rs. 5,00,000/- on the petitioner. The respondent contended that the petitioner had multiple opportunities to present submissions and that the penalty was not solely imposed under Section 117.Judgment:After considering the arguments, the court found merit in the petitioner's contentions. The court held that the petitioner was indeed not provided a reasonable opportunity to be heard and that the penalty of Rs. 5,00,000/- exceeded the statutory limit set by Section 117 of the Customs Act. Consequently, the impugned order was quashed in part, specifically regarding the penalty amount. The matter was remanded for reconsideration, with directions to issue a fresh order within six weeks, ensuring a reasonable opportunity for the petitioner, including a personal hearing.Conclusion:The court disposed of the case, directing the reconsideration of the penalty amount and ensuring compliance with the provisions of the Customs Act. No costs were awarded, and related motions were closed as per the court's order.