2005 (3) TMI 629 - AT - Customs

Summary

Issues:
1. Stay of recovery of remaining duty and penalty.
2. Dispute regarding levy of Special Additional Duty of Customs.
3. Quantum of penalty imposed.

Analysis:

Issue 1 - Stay of recovery of remaining duty and penalty:
The appellant, M/s. SCM Creations, imported polyester lining fabrics for actual use but diverted them into the market instead of using them as intended. The duty amount paid by the appellants did not match the amount mentioned in the show cause notice. The appellant had paid around Rs. 63 lakhs out of the total duty of Rs. 92 lakhs. The Tribunal held that the payment made by the appellants was in compliance with the provisions of Section 129E of the Customs Act, 1962. Consequently, the Tribunal stayed the recovery of the balance amount of duty and the penalty of Rs. 10 lakhs.

Issue 2 - Dispute regarding levy of Special Additional Duty of Customs:
The dispute centered around the levy of Special Additional Duty of Customs under Section 3A of the Customs Tariff Act, 1975. The appellant's counsel argued that as per sub-section (5) of Section 3A, this duty is not applicable to goods chargeable to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Tribunal agreed with this argument and remanded the matter to the adjudicating authority to consider this aspect further. The Tribunal clarified that only the issue related to Special Additional Duty was being remanded for re-adjudication.

Issue 3 - Quantum of penalty imposed:
The appellant's counsel contended that the penalty of Rs. 10 lakhs was excessive and requested a reduction. The learned SDR opposed this reduction, citing the involvement of another individual in importing materials for various persons. The Tribunal considered both arguments and decided to reduce the penalty to Rs. 5,00,000 (Rupees five lakhs) taking into account all the circumstances of the case. The Tribunal disposed of the appeal with this reduced penalty amount.

In conclusion, the Tribunal granted a stay on the recovery of the remaining duty and penalty, remanded the matter regarding the levy of Special Additional Duty for re-adjudication, and reduced the penalty imposed on the appellant.