Penalty reduction under Customs Act upheld where no active connivance in import fraud was proved.

Reduction of penalty under Section 112(a) of the Customs Act was upheld because the Tribunal's finding was factual: the appellant had permitted use of the importer exporter code but was not shown to have actively connived in the import fraud. On that basis, the penalty had already been reduced from Rs. 12 lakhs to Rs. 50,000/-. The High Court found no question of law arising from those findings and declined appellate interference, leaving the reduced penalty undisturbed.

---

---

Issues: Whether the reduction of penalty imposed under Section 112(a) of the Customs Act called for interference in appeal, and whether any question of law arose from the Tribunal's finding that the appellant had merely permitted use of the importer exporter code without active connivance in the import fraud.

Analysis: The Tribunal had found that the appellant had facilitated the use of the importer exporter code but had no active role in the improper importation of the goods and no proven connivance in the larger fraud. On that basis, it had already reduced the penalty from Rs. 12 lakhs to Rs. 50,000/-. The High Court found no legal question arising from those factual findings that would justify appellate interference.

Conclusion: No question of law arose for consideration, and the reduced penalty order was left undisturbed in favour of the Revenue.

---