TaxTMI 
TaxTMI 
2011 (3) TMI 948
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....n 112 of the Customs Act, 1962 against the appellant Shri Ashwani Deewan and penalty of Rs. 6 lakhs under Rule 26 of the said Rules and Rs. 3 lakhs under Section 112 of the said Act against the appellant Shri Mahendra Sharma. These appeals are confined the challenge to the penalty imposed against the appellants herein. 4. Learned Advocate for the appellants submitted that under order dated 11.11.2008, the Tribunal had remanded the matter to the Commissioner to deal the levy of penalty against the appellants afresh and accordingly the impugned order came to be passed. However, the authority imposed the penalty ignoring the basic requirement of provisions of Rule 26 of the said Rules as well as that of Section 112 of the said Act inasmuch as that both the provisions of law in order to exercise the powers thereunder and to impose the penalty require that the goods in respect of the person held responsible for having dealt with the goods should be confiscable and undisputedly in the case in hand, the goods were neither ordered to be confiscated nor there was any finding arrived at by the authority that the goods were liable for confiscation and, therefore, the authority could not ha....
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....der Section 111, or abets the doing or omission of such act, or who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111 shall be liable to various penalties as specified in different circumstances as described under the said provision of law. 8. Evidently, therefore, whether it is under Rule 26 of the said Rules or under Section 112 of the said Act, a person for having dealt with any goods in any manner can be made liable to pay the penalty as prescribed provided the goods are either excisable goods or the contravened goods and such person knows or has reason to believe that such goods are liable to confiscation under the statutory provisions comprised under the Excise Act or the Customs Act respectively. The basic requirement is that the person dealing with the goods who has either the knowledge or has reason to believe that such goods are liable to confiscation under either of the Acts. The requirement is not that the goods should be ordered to be confiscated. The r....
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.... SKO/HSD and for not using the same in the factory premises for intended purpose. By doing so, Shri Mahendra Sharma also rendered himself liable for penal action under Section 112 of the Customs Act, 1962 for his active role in evasion of duty of customs as well by the assessee No. 1". 11. Apparently, therefore, the authority had clearly arrived at the basic findings required to sustain the decision in relation to penal liability of the appellants. Undisputedly, the same findings were not disturbed by the Tribunal in the order dated 11.11.2008. While remanding the matter, it was essentially remanded on the point of quantification of the penalty. This is apparent from para 8, 9 and 10 of the said order dated 11.11.2008 which read thus:- "8. This is a consequential appeal which arose out of Appeal case No. 1982 of 08. In view of certain findings, the learned assessing authority imposed penalty of Rs. 1,00,00,000/- (Rupees one crore only) under Rule 26 of Central Excise Rules, 2002 on the appellant in this appeal. Similarly, learned Assessing Authority has also imposed penalty of Rs. 50,00,000/- (Rupees fifty lakhs only) under Section 112 of Customs Act, 1962. 9. The ap....
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....n order to circumvent the law & to siphon off the sale proceeds generated out of clandestinely cleared goods, he managed to receive the payments through above named companies. He had been managing the funds, at his own will, between M/s ADB Trade, M/s Jas Expoship & M/s C.T. Cotton Yarn Ltd. Investigation also revealed that noticee No. 1 procured duty free imported HSD/SKO. The entire quantity of such duty free imported material was not brought into the factory premises but sold in open market without payment of appropriate duties of customs, without issue of invoice & without accounting in the statutory records. All these activities were done on the direction of Shri Deewan. 30. Sh. Ramesh Nair, Advocate on behalf of noticee No. 2 has submitted reply dated 11.05.09 that there was no evidence or any finding which shows that noticee No. 2 was in the knowledge of the clearances of goods. In this regard it has been brought on record that noticee No. 2 was himself maintaining ledger for clearances of goods in his own handwriting regularly for the past 3-4 years. He had maintained two separate companies in the same premises to receive sale proceeds if received through cheque/DD /etc.....