AI Drafter 
TaxTMI 
TaxTMI 
2025 (9) TMI 265
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....h penalty of Rs.5,00,000/- on Appellant firm under Section 112(a) in Appeal No. C/85746/2022 and Rs.2,00,000/- on its partner Sanjay K. Shah also under Section 112(a) of the Customs Act 1962, assailing which amount as in excess of statutory provision, Appellant is before this forum. 2. Fact of the case, in a nut shell, is that Appellant partnership firm, was engaged in business of cutting and polishing rough diamonds and retailing the polished diamonds, had placed order in January, 2015 for purchase and import of "Rough Diamonds" from Dubai from one proprietorship firm M/s. XPAN Diamonds, whose proprietor Mr. Anju Shah is his distance relation. On examination of goods by Customs after Appellant filed Bill of Entry on dated 24.01.2015, go....
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....ich is Rs.8,291/- only, apart from the fact that such fine is not imposable against the partnership firm as well as against one of its partners. Further, with reference to decision in Suraj Diamonds (India) Limited Vs. Commissioner of Customs (Airport), Mumbai as reported in 2008 (227) ELT 471 (Tri.-Mumbai) and decision in Guru Ispat Ltd. Vs. Commissioner of Customs (Port), Calcutta reported in 2003 (151) ELT 384 (Tri.-Kolkata), he also argued that when importer is not aware of the goods being changed against worthless products and when no mala fide intention on the part of Appellant is noticeable, no redemption fine and penalty could be imposable. With reference to decision of Hon'ble Bombay High Court passed in the case of Royal Synth....
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..... He further submitted that concerning imposition of penalty on both firm and its partner, he has submitted judgement that was passed by this Tribunal in Royal Synthetics, Ajay Shah, which followed Larger Bench's decision of the Hon'ble Bombay High Court in M/s. Amritlakshmi Machine Works case that would have precedent value over its earlier decision. 6. I have gone through the case record, submission made by the parties and also the relied upon decisions. At the outset, it is to be noted that in its earlier order dated 28.02.2019, this Tribunal had noted the submission of Appellant that it is not contesting duty or the value of goods but it is contesting only redemption fine and penalty. It would be worthwhile to reproduce para 3 of....
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....dismissal of appeal filed by the Appellant. The learned Counsel admitted the mistake committed by the Appellant and submitted that one more opportunity may be given so that the Appellant can make these submissions before the authorities below." With above notings, this Tribunal had remanded the matter back to the Appellate Authority for re-hearing as those submissions were not placed before him on the earlier occasion. Therefore, this appeal is to be kept restricted on discussion on the merit of the quantum of redemption fine and penalty and imposition of penalty on both firm and its partner. Needless to say that importer and exporter are related parties and the amount shown as transaction value is unbelievably high and therefore, knowle....
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....in the domain of the Assessing Officer to proceed in case of economic offences committed against the contrary, for which separate wings are already in place. Therefore, imposition of such higher amount as penalty is not at all justified, which is also required to be restricted to the value of goods namely i.e. Rs.8291/- at the maximum. 8. Now the question arises as to on whom such penalty is to be imposed? Though contradictory decisions are cited by the adversaries on this issue, it would go without saying that no such provision to impose simultaneous penalty is available in Customs Act and bringing Section 135(i)(a) of the Customs Act, that is meant for criminal prosecution, in an adjudication proceeding under Section 112(a) of the Act,....