2004 (3) TMI 670 - AT - Customs

Summary

Issues Involved:
1. Duty liability confirmation under Customs Act.
2. Penalty imposition under Section 112(a) of the Customs Act.
3. Quantification of duty in Show Cause Notice.
4. Fulfillment of export obligation under Advance Licences.
5. Justification of penalty imposed on an individual.

Analysis:

Issue 1: Duty Liability Confirmation under Customs Act
The appellants contested the Order-in-Original confirming duty liability of Rs. 1,23,84,492. The Commissioner noted the duty payment of Rs. 70,00,000 and imposed a penalty of Rs. 50,00,000 on an individual for contravening conditions of a notification and rendering goods liable to confiscation. The charge against the appellants was selling imported silk under Duty Exemption Scheme without paying duty. The Commissioner reduced the duty demand by acknowledging double entries and fulfilled export obligations under certain Advance Licences.

Issue 2: Penalty Imposition under Section 112(a) of the Customs Act
The penalty of Rs. 50,00,000 on the individual was contested, claiming no mala fide intention and compliance with license terms. The Tribunal noted the excessive penalty and reduced it to Rs. 10,00,000, considering the appellant's compliance with Advance Licence terms despite some shortfall. The penalty was reduced based on the duty liability calculation of Rs. 1,05,28,334.

Issue 3: Quantification of Duty in Show Cause Notice
The appellants raised concerns about the quantification of duty in the Show Cause Notice, which the Commissioner partially acknowledged by reducing the duty demand due to double entries and fulfilled export obligations under specific Advance Licences.

Issue 4: Fulfillment of Export Obligation under Advance Licences
The appellants presented evidence of fulfilling export obligations under disputed Advance Licences, which the Commissioner did not fully consider. The Tribunal remanded the matter to the Commissioner for re-adjudication on the abatement claim based on the evidence provided by the appellants.

Issue 5: Justification of Penalty Imposed on an Individual
The Tribunal found the penalty imposed excessive but justified to some extent, reducing it to Rs. 10,00,000. The penalty reduction was based on the appellant's compliance with Advance Licence terms despite some shortcomings and the hindrance caused by license seizure.

In conclusion, the Tribunal modified the impugned order by reducing the penalty imposed on the individual and remanding the matter to the Commissioner for re-consideration of abatements claimed on certain Advance Licences.