Case Law Details
Varman Aviation Private Limited Vs Commissioner of Customs (CESTAT Bangalore)
Conclusion: An appeal could not be rejected stating non-compliance under Section 129E. Hence, the matter need to be remanded to Commissioner (A) to decide the issue on merit. The Tribunal set aside the impugned order to the extent of holding that computation of penalty under Section 114A would include both demand and interest.
Held: In the appellant’s appeal, CIT (A) had directed to make a pre-deposit of Rs.35/- lakhs against the total liability of Rs.24,81,500/- with equivalent penalty. Aggrieved by the said order, they filed a writ petition before the Hon’ble High Court of Karnataka. Later, in view of amendments made to Section 129E of the Customs Act, 1962 with effect from 16.09.2014, they withdrew their petition before the Hon’ble High Court and so as to approach the CIT(A) by filing a modification application in the light of the amendment of the provisions with effect from 16.09.2014. Consequently, they filed a modification application; however, CIT (A) did not consider the same and rejected the appeal on the ground of non- compliance with Section 129E of the Customs Act, 1962. He further submitted that before this Tribunal, they had complied with the provisions of Section 129E and hence, the present appeal. It was held that Commissioner (A) had not considered the issue on merit but dismissed the appeal on the ground of non-compliance with the provisions of Section 129E of the Customs Act, 1962. It was found that against the duty amount of Rs.24,81,500/-, assessee had already made a pre-deposit of Rs.2,48,150/- before this Tribunal. Therefore, the appellant had complied with the provisions of Section 129E of the Customs Act, 1962. Hence, the matter need to be remanded to Commissioner (A) to decide the issue on merit. At this stage, the issue was pending for more than 10 years, therefore, a timeframe was necessary for disposal of the appeal. Considering the period involved in this appeal (C/20549/2015), it would be appropriate to direct Commissioner (A) to decide the issue on merit within a period of three months from the date of communication of this order. Needless to mention that appellants be given an opportunity to present their case. Commissioner (A) had observed that penalty under Section 114A should be equivalent to the total differential duty demanded and interest. It was contrary to the principles of law laid down by the Hon’ble High Court of Karnataka in the case of Commissioner of Central Excise vs. Sony Sales Corporation : 2021 (376) ELT 472 which had been consistently followed by the Tribunal in series of cases.
FULL TEXT OF THE CESTAT BANGALORE ORDER
These two appeals are filed by the appellant against common Order-in-Appeal No.464-465/2014 dated 21.11.2014 passed by the Commissioner of Customs (Appeals), Bangalore. Since common issues are involved in these appeals; hence, these are taken up together for hearing and disposal.
2. Heard both sides and perused the records.
3. At the outset, the learned advocate for the appellant has submitted that the learned Commissioner (A) had dismissed their appeal for non-compliance with the provisions of Section 129E of the Customs Act, 1962.
4. The learned advocate has submitted that aggrieved by the Order-in-Original, two appeals were filed before learned Commissioner (A), one by the appellant and another by the Revenue.
4.1 In the appellant’s appeal, the learned Commissioner (A) had directed to make a pre-deposit of Rs.35/- lakhs against the total liability of Rs.24,81,500/- with equivalent penalty. Aggrieved by the said order, they filed a Writ Petition No.6153/2014 before the Hon’ble High Court of Karnataka. Later, in view of amendments made to Section 129E of the Customs Act, 1962 with effect from 16.09.2014, they withdrew their petition before the Hon’ble High Court and so as to approach the learned Commissioner (A) by filing a modification application in the light of the amendment of the provisions with effect from 16.09.2014. Consequently, they filed a modification application; however, the learned Commissioner (A) did not consider the same and rejected the appeal on the ground of non- compliance with Section 129E of the Customs Act, 1962. He further submits that before this Tribunal, they have complied with the provisions of Section 129E and hence, the present appeal.
5. We find that the learned Commissioner (A) has not considered the issue on merit but dismissed the appeal on the ground of non-compliance with the provisions of Section 129E of the Customs Act, 1962. We find that against the duty amount of Rs.24,81,500/-, the appellant had already made a pre-deposit of Rs.2,48,150/- before this Tribunal. Therefore, the appellant has complied with the provisions of Section 129E of the Customs Act, 1962. Hence, the matter needs to be remanded to the learned Commissioner (A) to decide the issue on merit. At this stage, we find that the issue is pending for more than 10 years, therefore, a timeframe is necessary for disposal of the appeal. Learned Authorised Representative for the Revenue has no objection. Considering the period involved in this appeal (C/20549/2015), we find that it would be appropriate to direct the learned Commissioner (A) to decide the issue on merit within a period of three months from the date of communication of this order. Needless to mention that the appellants be given an opportunity to present their case. All issues are kept open.
6. While disposing the appeal filed by the Revenue, the learned Commissioner (A) decided the issue on merit in so far as the quantum of penalty imposable on the appellant is The learned Commissioner (A) had observed that the penalty under Section 114A should be equivalent to the total differential duty demanded and interest. The learned advocate submits that it is contrary to the principles of law laid down by the Hon’ble High Court of Karnataka in the case of Commissioner of Central Excise vs. Sony Sales Corporation : 2021 (376) ELT 472 which has been consistently followed by the Tribunal in series of cases. Thus, we do not find any merit in the observations made by the learned Commissioner (A); consequently, the impugned order is set aside to the extent of holding that computation of penalty under Section 114A would include both demand and interest. Appeal No. C/20550/2015 is allowed.
7. In the result, Appeal No. C/20549/2015 is allowed by way of remand to the Commissioner (A) and Appeal No.C/20550/2015 is allowed. Appeals are disposed of on above terms.
(Order pronounced and dictated in Open Court.)
Author Bio
