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2014 (4) TMI 1025 - HC - CustomsImposition of Simultaneous Penalties - Whether CESTAT erred in imposing simultaneous penalties on both the Partner and Partnership firm – Two conflicting opinions of two Division Benches of this Court - Section 112(a) of the Customs Act, 1962 - Held that:- This Court is not in agreement that two opinions rendered by two Division Benches of this Court are not conflicting - Textoplast Industries [2011 (7) TMI 402 - Bombay High Court]recognizes the settled concept and applies it, namely, a firm cannot be said to have an independent existence than that of partners even when it comes for imposition of penalty - Whereas, Commissioner of Customs (E.P.) v/s Jupiter Exports [2007 (6) TMI 2 - HIGH COURT, BOMBAY] holds that there is no difference between criminal prosecution and adjudication or penalty proceedings - Therefore, even in cases falling under the Customs Act, dealing with imposition of penalty same cannot be confined only on a partnership or its partner - Division Bench, therefore, does not agree with the principles applied in earlier Division Bench judgment and expressly differs from it - This divergence of opinion is apparent and this Court cannot follow judgment in Textoplast Industries. It is difficult to hold that Division Bench in Jupiter Exports is per incuriam or that the law laid down therein is no longer good law in the light of the judgment in Standard Chartered Bank v/s Directorate of Enforcement [2006 (2) TMI 272 - SUPREME COURT OF INDIA] noting that the controversy before Supreme Court was decided in the backdrop of the facts and particularly the legal position and status of a company incorporated and registered under the Indian Companies Act, 1956, this Appeal cannot be dismissed by following judgment in Textoplast Industries - Judgment in Textoplast Industries cannot be said to be either per incuriam or no longer good law - Further, in Director of Settlements, A.P. v/s M.R. Apparao [2002 (3) TMI 909 - SUPREME COURT] as far as a binding precedent is concerned, it cannot be assailed on the ground that certain issues were not considered or the relevant provisions were not brought to the notice of the Court. Matter referred to larger bench referring the following questions for opinion of a Larger Bench: (i) Whether, under Customs Act, and particularly in exercise of the powers conferred by Section 112(a) thereof, simultaneous penalties on both the Partner and Partnership firm can be imposed and (ii) Whether, judgment in Jupiter Exports holding that separate penalty on a partnership firm and a partner cannot be imposed, lays down the correct law or whether, as held by the later Division Bench in the case of Textoplast Industries, it is permissible to impose penalty separately on a partnership firm and a partner particularly in adjudication proceedings under the Customs Act, 1962. - Referred to larger bench.
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