Case: M/S Carpenter Classic Exim. P. Ltd Vs. Commr. Of Customs (Imports)

addressed to Anchise Ballestrieri and Vittorio Tollardo of Veneta Cucine S.PA. Treviso, Italy. Photocopy of a fax message No.CCEPL/TM/089/97 dated 5.4.97, said to have been sent by Carpenter Classics to Thomas Mathew. Photocopy of a fax message dated 8.10.98, said to have been sent to Thomas Mathew by Ravi Karumbaiah. Photocopy of a letter No.CCEL/Proma/1362/97-98 dated 10.1.98 to have been sent by Carpenter Classics to Proma SRL. Photocopy of Bill of quantity and Order confirmations of M/s. Veneta Cucine pertaining to shipment called lndia-13 and lndia-14 Photocopy of packing list of M/s. Veneta Cucine pertaining to shipment called lndia-13 and lndia-14. 8. The CESTAT referred to the statements given by Shri Ravi Karumbaiah under Section 108 of the Act. It held that the conclusions were supportable as the evidence on record clearly established that there was under valuation to the extent of 65% with which Shri Thomas played crucial role in the nefarious activities. It was held that both Ravi Karumbaiah and Thomas Mathew were liable to penalty under Section 112(a) of the Act and the company was also liable to penalty under Section 114A of the Act. The differential duty was to be paid alongwith interest. The penalty however was deleted so far as Shri Sanjeev Kabbur is concerned. 9. The primary stand is that even before the show cause notice was issued, to prove its bona fide, a sum of Rs.25 lakhs was paid. Reference is made by learned counsel for the appellant to the proviso to Section 114A of the Act. It is submitted that since reduction in the quantum is permissible, discretion is given in the matter of imposition of penalty. 10. Learned counsel for the respondents on the other hand supported the judgment. 11. Section 112(a) and Section 114A read as follows: "112(a) Penalty for improper importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or 114A-" Penalty for short-levy or non-levy of duty in certain cases. - Where the duty has not been levied or has been short-levied or the interest has not been charged or paid or has [xxx] been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts, the person who is liable to pay the duty or interest, as the case may be, as determined under sub-section (2) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined: Provided that where such duty or interest, as the case may be, as determined under sub-section (2) of section 28, and the interest payable thereon under section 28AB, is paid within thirty days from the date of the communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty or interest, as the case may be, so determined : Provided further that the benefit of reduced penalty under the first proviso shall be available subject to the condition that the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that where the duty or interest determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty or interest as reduced or increased, as the case may be, shall be taken into account: Provided also that in case where the duty or interest determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available if the amount of the duty or the interest so increased, along with the interest payable thereon under section 28AB, and twenty-five per cent of the consequential increase in penalty have also been paid within thirty days of the communication of the order by which such increase in the duty or interest takes effect: Provided also that where any penalty has been levied under this section, no penalty shall be levied under section 112 or section 114. Explanation. - For the removal of doubts, it is hereby declared that - (i) the provisions of this section shall also apply to cases in which the order determining the duty or interest under sub-section (2) of section 28 relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (ii) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person." 12. The relevant proviso in Section 114A is applicable only where duty has been paid. In the instant case the claim that Rs.25 lakhs which is not whole of the differential duty is claimed to have been paid before the issuance of the show cause notice. The same is not a mitigating circumstance. 13. Above being the position, the appeal filed by the company is without merit and is dismissed. So far as appeal filed by Ravi Karumbaiah is concerned it is to be seen that the provision of penalty is not mandatory in the sense since discretion is given. CESTAT has not dealt with the question whether the quantum of penalty levied under Section 114A is reasonable and fair. It appears that Ravi Karumbaiah was the Managing Director and Chief Promoter of the appellant company while Thomas Mathew who was the director of the appellant company was also a Director of Proma SRL.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]The relevant proviso in Section 114A is applicable only where duty has been paid. In the instant case the claim that Rs.25 lakhs which is not whole of the differential duty is claimed to have been paid before the issuance of the show cause notice. The same is not a mitigating circumstanceAbove being the position, the appeal filed by the company is without merit and is dismissed. So far as appeal filed by Ravi Karumbaiah is concerned it is to be seen that the provision of penalty is not mandatory in the sense since discretion is given. CESTAT has not dealt with the question whether the quantum of penalty levied under Section 114A is reasonable and fair. It appears that Ravi Karumbaiah was the Managing Director and Chief Promoter of the appellant company while Thomas Mathew who was the director of the appellant company was also a Director of Proma SRL.