VINOD KUMAR MATHUR Vs. UNION OF INDIA

JUDGEMENT

(1.) These writ petitions challenge an order passed on 22nd November, 2013 by respondent No. 2 Settlement Commission. The order is challenged only to the extent that the petitioner company and its employees are required to pay penalty quantified at Rs. 1,25,000/- and Rs. 10,000/-.

(2.) We enquired from the learned Counsel for the petitioners as to why after obtaining complete relief and in relation to duty liability does the petitioner company and its employees deem it necessary to challenge the penalty imposed. Mr. Sridharan learned Senior Counsel submitted that imposing of penalty has other legal consequences. Tomorrow, the petitioners may not be permitted to approach the Settlement Commission and in any other case. Therefore, imposition of penalty will prejudice them.

(3.) The second argument was that when the Settlement Commission has passed an order not directing payment of additional Customs duty over and above that paid by the company so also does not require the company to pay any interest, then, justification for imposing penalty should have been reasoned out meaning thereby cogent and satisfactory reasons should have been assigned for imposition of penalties. The penalties are imposed with one line reasoning that the offences committed by the petitioner company and the employees are grave in nature. Mr. Sridharan submits in that regard the issue pertains to classification and was an arguable one. It is not as if the petitioner can be termed as guilty of suppression, misclassification or misdeclaration of facts. There was a dispute and which was genuine. The Bench has assigned reasons in Para 8.4 that there is a letter dated 14th January, 2009 on record from the overseas supplier of the petitioner company informing that source of elemental sulphur contained in the imported product insoluble sulpher crystex HB OT 20, was obtained from refining of crude oil. Mr. Sridharan submits that this letter firstly could not have been relied upon and to arrive at any conclusion, much less with regard to penalty. Secondly, this letter has to be read as a whole and not in part. A complete reading of this letter would denote as to how the department itself classified the product under CTH 2503 00 90. In the circumstances and when this was a case of revenue neutral, there was no justification for imposition of penalty.