AI Drafter 
TaxTMI 
TaxTMI 
2025 (8) TMI 729
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....ing (CTH) 8473 3099 @ nil rate of BCD by availing benefit of exemption Notification No. 24/2005 dated 1.3.2005. Customs Authorities were of the opinion that the goods merited classification under CTH 8528 7100 which attracts duty @ 10% BCD. After issuance of Show Cause Notice (SCN), the Ld. Adjudicating Authority rejected the declared classification and reclassified the goods under Tariff Item 8528 7100 and among other things imposed a penalty of Rs.5,00,000/- each on the appellants herein under sec. 112(a) of the Customs Act, 1962. The appeal filed by the company stood abated as per this Tribunals Final Order No. 40086 to 40088/2025 dated 15.1.2025, since the Company had gone into liquidation and NCLT had accepted the Resolution Plan. The present appeals are against the imposition of penalty under sec. 112(a)of the Customs Act, 1962 against both the appellants. 3. Shri Madan G, Ld. Counsel appeared for the appellants and Smt. Anandalakshmi Ganeshram, Ld. Authorized Representative appeared for the respondent. 4.1 The Ld. Counsel for the appellants Shri Madan G submitted that; A) A penalty cannot be imposed both on the company and the appellant for the same alleged ac....
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.... diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a Company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the Company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation : For the purpose of this section : (a) "Company" means any body corporate and includes a firm or other association of individuals; and (b) "Director" in relation to a firm means a partner in the firm. The Section quoted hereinabove, clearly indicates that what was till then an offence by a Company only would be an offence not only by the Company but also by the persons who are running the affairs of the Company and those persons being one specified in Section 9AA. The moment this aspect is borne in mind it is quite clear that Section 9AA is not a procedural section or a Section descr....
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....hennai and Kolkata; that they clear their import shipments through M/s. Blessing Cargo Care Pvt. Ltd, Chennai; that he is heading the product procurement team which decides on quantity to be ordered and based on that he places the order with their foreign suppliers; that once the deal is through and shipment is ready, the Import team arranges for the shipment into India; that he is aware of the Customs & Central Excise duty structure for their products; that he is empowered to take decisions regarding classification of goods imported by them; that he himself takes this decision as he is well versed with Customs Tariff. He further stated that they have classified T.V. Tuner Box under Tariff Item 84733099, reason being that the product does the function of converting signals into data form for the computer and that this T.V. Tuner Box functions with the computer only and hence the same is classified under 84733099 as accessories of Computer. He further stated that it does not do any value addition in the normal functioning of a computer. It also does not play any role in the storage, retrieval, or processing of the data in the computer apart from receiving T.V. Signals. On being aske....
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....and his colleagues resulting in any loss of Govt, revenue. He further stated that he is taking full responsibility for the statement given by Shri Akshay Joshi, Executive, Technical Training, Shri Balraj Virdi, Deputy General Manager (Supply Chain) and Shri R. Ravichandran, CHA." (emphasis added) 7.2 The finding in the OIO relevant to the appellants are at paras 22 and 23, and are extracted below : "22. In view of the above it appears that M/s. Neoteric Informatique Ltd. the importer and Shri Paras H. Shah, Managing Director along with Shri Akshay Joshi, Executive, Technical Training, Shri Balrai Virdi, deputy General Manager, Supply Chain and Shri R. Ravichandran, CHA had connived between them to willfully mis-declare and mis-classify the imported goods in the Bills of Entry filed by them to evade payment of appropriate Customs duty on the goods imported. It also appears that they had cleared goods through Custom House (Seaport - Import), Chennai, under the Bills of Entry detailed in Annexure A attached. It therefore appears that the importer has thus short paid customs duty to the extent of Rs.24,20,131/- (Rupees Twenty four lakh Twenty thousand One hundred Thirty one....
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....the impugned order. Shri Paras H. Shah stated that he is aware that the T.V. Tuner box is classified under Tariff Item 8473 3099; that he is aware that they are availing the benefits of Customs Notification 24/2005 dated 1/3/2005: that since he is not technically conversant about the subject matter he has authorized Sri Balrai Virdi to clarify the technicality of the goods. Similarly, Shri Balraj Virdi, Deputy General Manager has given his reasons for having classified the T.V. Tuner Box under Tariff Item 84733099. He stated that the product does the function of converting signals into data form for the computer and that this T.V. Tuner Box functions with the computer only and hence the same is classified under CTH 8473 3099 as accessories of Computer. Both the appellants have thus given a reasonable response of their understanding of the classification of goods. That they may have erred is of no consequence to the issue at hand. Revenue has not been able to demonstrate a guilty mind. No mis-declaration is admitted or gleaned from the narration and the dispute is thus an interpretative one. 7.4 The SCN does not make any concrete allegations that any of the appellants knew that t....