2000 (5) TMI 96 - AT - Customs

Tribunal modifies penalties, upholds revenue evasion charge.

The Tribunal modified the impugned order by vacating the penalty on the Managing Director, limiting the penalty on the company, adjusting interest ... Penalty Issues involved:The issues involved in this case include undervaluation of imported goods, imposition of penalty under section 114A, legality of penalty imposed on the Director of the company, applicability of Section 114A to imports prior to 28-9-1996, and the payment of interest as per Section 28AB of the Customs Act.Undervaluation of Imported Goods:The company imported goods from M/s. Future Electronics, Tokyo, and deposited the duty liability even before the show cause notice was issued. However, a subsequent show cause notice alleged undervaluation, leading to a claim of customs duty evasion. The adjudicating authority confirmed the demand, stating that the company showed lesser value for the goods imported to evade duty payment. The argument against mis-declaration was withdrawn by the appellant, and the Tribunal upheld the conclusion of undervaluation.Legality of Penalty Imposed on the Director:The appellant contested the penalty imposed on the Director of the company, arguing that as a Public Limited Company, only the company should be liable for penalties, not the Director. The Tribunal agreed, citing relevant sections of the Customs Act and a Supreme Court case precedent, vacating the penalty imposed on the Managing Director.Applicability of Section 114A to Imports Prior to 28-9-1996:The appellant challenged the imposition of penalties under Section 114A for imports made before 28-9-1996 when the provision came into effect. The Tribunal concurred, stating that penalties under Section 114A can only apply to situations arising after the enactment of the provision. The penalty on the company was limited to Rs. 27,49,000 for goods imported post-28-9-1996.Payment of Interest as per Section 28AB:Interest was ordered to be paid by the appellant as per Section 28AB of the Customs Act. The Tribunal clarified that interest could only be levied on duty payable for goods imported after 28-9-1996, amounting to Rs. 3,16,242, which was accepted by the Departmental Representative.Conclusion:The Tribunal modified the impugned order, vacating the penalty on the Managing Director, limiting the penalty on the company, adjusting interest payable, and rejecting the contention that the earlier duty deposit exonerated the appellant from further liability. The Tribunal upheld the penalty imposed due to attempted revenue evasion and disposed of the appeals accordingly.