TaxTMI 
TaxTMI 
2017 (8) TMI 90
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....in the manufacture of resultant export products and had instead disposed of the same in the domestic market. It further appeared that Shri Paresh H.Parekh, Managing Director of Kunal Overseas had fraudulently obtained advance licence, cleared imported goods free of customs duty and sold them in the local market for cash premium. It also appeared to the department that one Shri Pradeep S.Mehta, Managing Director of Vishal Exports had masterminded the operation of diverting the same imported duty-free. Notices were issued, inter alia, proposing confiscation of 300 MTs of LDPE so allegedly diverted duty free goods, demanding differential duty of Rs. 58,07,183/- being the customs duty evaded thereon, along with interest. SCN also proposed imposition of penalty under Section 114A of the Customs Act, 1962 on M/s.Kunal Overseas, Shri Paresh H.Parekh, Managing Director of Kunal Overseas, Shri Pradeep S.Mehta, M.D of Vishal Exports and Shri Anant B. Timbadia. The proposals for demand of duty with interest thereon was confirmed in the impugned order dt.23.03.2007 which also imposed penalties under various of sections of Customs Act, 1962 as under : (1) Rs. 58,07,183/- under Section 114A o....
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....khs deposited by them should have been ordered for refund by adjudicating authority. On the other hand, the authority has ordered that, the said amount be adjusted towards the amount of penalty imposed on M/s. Kunal Overseas. When there is no penalty on the appellant, therefore question of any adjustment cannot arise. 4. On the other hand, Shri A. Cletus, Ld. A.R supports the adjudication. He further submits that in respect of appeal filed by Shri Pradeep S. Mehta (C/248/2007),the show cause notice dt. 17.3.2003 had very cleared alleged in para 18 (c) that all organizations and persons who committed, associated or abetted the violation in respect of the goods cleared in the name of Kunal Overseas become liable to penal action under the provisions of Section 112 of the Customs Act, 1962. Accordingly, in para 18 (f) of the notice, it had been alleged that Shri Pradeep Mehta had rendered the goods liable to penal action under Section 112(a) and 112 (b) of the Customs Act, 1962. In the circumstances, merely because in para-20 (e) of the notice proposal for imposition of penalty has been done under Section 114A of the Customs Act, 1962, actual imposition of penalty of Rs. 15,00,000/-....
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....the adjudicating authority can impose penalty under Section 112 instead. We are of the considered opinion that this cannot be done. As found above, the scope and extent of the two Sections 112 and 114A are different and penalties provided therein are imposed in different situations and reasons. Surely then, penalty proposed under Section 114A in the notice cannot be imposed under Section 112 in the adjudication order. Section 112 and Section 114A are certainly not interchangeable legal provisions nor are they statutory synonyms. In arriving at this conclusion, We draw sustenance from the ratio of the decision of the Hon'ble High Court Delhi in CC (Import & General) Vs Care Foundation - 2014 (302) ELT 181 (Del.), where it was unequivocally held that if Section 112 of the Customs Act is not invoked, penalty should not be imposed under it on the ground that it could have been imposed. In the event, we find that penalty imposed under Section 112 on the appellant in the impugned order is not supported by any how cause notice thereat and hence will have to be set aside, which we hereby do. Appeal of Shri Pradeep S. Mehta (C/248/2007) against imposition of penalty of Rs. 15 lakhs unde....
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....ahead and adjusted and appropriated the entire amount of Rs. 28 lakhs towards the penalty of Rs. 58,07,183/- imposed under Section 114A of the Act on Shri Paresh H. Parekh, M.D. of Kunal Overseas Ltd. In our considered opinion, there is no legal sanction for such adjustment and appropriation of monies deposited by one person towards liability of another. It is not even the case that appellants have given No Objection Certificate or a carte blanche of any sort to the department to go ahead with such adjustment / appropriation. This being so, the impugned adjustment / appropriation is unsustainable in law. While arriving at this conclusion, we draw sustenance from the following case laws : (i) CC (EP) Mumbai Vs VirendraKanshiram Gandhi - 2003 (155) ELT 128 (Tri.-Mumbai) Para-9 of the said decision is reproduced below for ready reference : "9. In the light of the above we hold that there is no prima facie substance in the contention of the department that the amount of Rs. 2,00,30,000/- paid by M/s. Dimple Overseas Limited/Shri V.K. Gandhi represents the duty payable in the present case so as to be available for adjustment towards duty and penalty confirmed and imposed agains....