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of <h1>Penalty set aside where Section 28(2) notice inappropriate after prompt payment of differential duty and interest for moisture variation</h1> CESTAT allowed the appeal, holding that issuance of the SCN under Section 28(2) was inappropriate where the appellant had realized higher payment from the ... Levy of penalty - Issuance of SCN as per Section 28(2) of the Customs Act 1962 - appellant had realized higher amount from the overseas importer in view of the difference in the moisture content - HELD THAT:- Admittedly the appellant realized higher amount in view of the difference in the moisture content. On being pointed out, the appellant has paid the differential duty along with interest as has already been noted in the Show Cause Notice. Therefore, there are force in the appellant's argument that Show Cause Notice itself should not have been issued as per the provisions of Section 28(2) of the Customs Act 1962. There are also force in the appellant's argument that MMTC being a reputed Public Sector Undertaking, will have no intent to evade the duty for suppressing any factual details. Their bonafides are clarified by the fact that as soon as the issue was raised by the Department they have voluntarily paid the differential duty along with interest. The penalty imposed on the appellant set aside - appeal allowed. Appellant, a Public Sector Undertaking, exported iron ore fines (June 2008-April 2012) declaring value based on certain moisture content. Post-verification, a higher realization due to lower moisture content was detected; the appellant paid differential duty (Rs.4,62,172) and interest on 30.10.2013 before issuance of the Show Cause Notice dated 13.04.2014. Adjudicating authority confirmed demand, appropriated payments, and imposed penalties under s.114A (Rs.150,543) and s.114AA (Rs.1,000); appellate authority dismissed the appeal. Tribunal finds that, since the appellant voluntarily paid the differential duty with interest upon department's detection, 'Show Cause Notice itself should not have been issued as per the provisions of Section 28(2) of the Customs Act, 1962.' The Tribunal accepts that the PSU's conduct shows no intent to evade duty and that its 'bonafides are clarified' by immediate payment. Applying statutory provisions and the factual matrix, the Tribunal set aside the penalties and allowed consequential reliefs as per law.
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