2003 (5) TMI 382 - AT - Customs

Summary

Issues:
- Imposition of penalty under Section 112(a) of Customs and Rule 209A of Central Excise Rules on Directors of a company for customs duty and central excise duty violations.

Analysis:
The judgment involves three appeals by the Revenue seeking penalties under Section 112(a) of the Customs Act and Rule 209A of the Central Excise Rules against three respondents who are Directors in a company. The respondents imported capital goods without paying Customs duty and Central Excise duty. The Commissioner had confiscated the goods and imposed penalties on the company but did not penalize the directors. The Revenue argued that penalties should be imposed on the directors as well since the company cannot act independently, and the directors failed to maintain proper accounts or cooperate with the authorities.

The Senior Departmental Representative contended that penalties should be imposed on the directors as they were responsible for the company's actions and failed to fulfill their obligations. The Tribunal had previously upheld the penalties on the company but reduced the fines, indicating that the original penalties were excessive. However, the Tribunal noted that no specific allegations or evidence were presented against the directors to justify imposing penalties on them. The Commissioner's finding stated that no cogent grounds were provided for penalizing the directors, and the Revenue failed to rebut this finding with any material evidence.

Upon reviewing the submissions and records, the Tribunal concluded that penalties could only be imposed on individuals who were directly involved in acts or omissions leading to goods being liable for confiscation. Since no evidence was presented to show that the directors knew or believed the goods were liable for confiscation, the Tribunal rejected the Revenue's appeals. The Tribunal also considered the previous reduction of penalties on the company as a basis for not imposing any penalties on the directors. Therefore, all three appeals by the Revenue were dismissed, and no penalties were imposed on the directors.