INTELECOM LTD. Vs. COMMISSIONER OF CUSTOMS (IMPORT)

JUDGEMENT

(1.) In this appeal which has been filed by the appellants against the impugned Order -in -Original dated 28.2.2003 passed by the Commissioner of Customs, the challenge has been made to the imposition of penalty on the appellants under Section 112(a) of the Customs Act.

(2.) The learned Counsel has contended that the provisions of Section 112(a) of the Customs Act are not attracted to the case of the appellants at all. The stand of the Department regarding the violation of the conditions of Exemption Notification No. 3/89 -Cus dated 9.1.89 under which the goods were imported by the appellants free of customs duty, is contradictory as in the show cause notice it has been alleged that the exemption under this Notification was not available to the appellants at the time of import of the goods and even the Commissioner in the impugned order has also so observed, whereas on the other hand, the Commissioner has imposed the penalty by holding that the appellants had committed violation of the terms of the above said Notification by allowing the commercial use of the goods to the Department of Telecommunication (in short DOT). He has also contended that inspite of alleging in the show cause notice that benefit of the above -said Notification was not available to the appellants, still no duty demand has been confirmed against them through the impugned order by the Commissioner and in the absence of confirmation of the duty, no penalty could be imposed under Section 112(a) of the Customs Act. The impugned order according to the Counsel being bad in law, deserves to be set aside.

(3.) On the other hand, the learned JDR has reiterated the correctness of the impugned order. He has contended that since the appellants allowed the commercial use of the imported goods to the DOT for whom the goods were imported for validation tests, in order to procure the order, they had violated the condition of the exemption Notification No. 3/89 and as such penalty has been rightly imposed on them.