RVS Petrochemicals Limited Vs Commissioner of Customs (CESTAT Ahmedabad)
In the case above mentioned CESTAT deleted penalty imposed u/s 114 A by observing that it is demand jointly and severally.
Appellants are seeking setting aside of impugned order imposing penalty u/s 114A of Customs Act. Appellant purchased goods from BGH Exim Ltd. on high sea sale (during the transit on high sea). BGH issued invoice for sale of goods and also raised debit notes for certain expenses. Department suspected that BGH undervalued the goods by bifurcating the value of imported goods. As goods were cleared on the bill of entry of the appellant, hence it was made a party by the department. Differential custom duty was demanded jointly and severally from BGH and appellant. Penalty was proposed against appellant under Section 114A and 112 of Customs Act. BGH approached settlement commission and vide its order settlement commission dropped penalty u/s 112. Demand cannot be raised jointly and severally. On the other hand, department relied upon the impugned order.
Finally, considering the submission made by the parties CESTAT held that from the plain reading of the section 114 A it is clear that penalty u/s 114 A can be imposed only when duty is payable. As per impugned order duty is payable by BGH which is settled by settlement commission. Duty was confirmed against BGH only which is demanded jointly and severally which is not sustainable in the eye of the law. Hence, penalty order u/s 114A is set-aside.
