Legal principle

Where the body of an adjudication order records that penalty is imposable under section 112(ii) of the Customs Act but the operative part mistakenly cites section 114AA, the operative part can be corrected so that the penalty stands imposed under section 112(ii).

Court decision

The Tribunal allowed the department's appeal, holding that the Rs. 50,000 penalty should have been imposed on Mayank Dang under section 112(ii) and not under section 114AA, and directed that paragraph 118(ix) of the impugned order be read as imposing the Rs. 50,000 penalty under section 112(ii).

Facts

DRI intelligence indicated that Customs Broker Rajiv Shewaramani, along with several importers, had formed a cartel engaged in large-scale duty evasion on imports of furniture and furniture parts through undervaluation and misdeclaration of description and weight. Statements, including that of the respondent Mayank Dang, were recorded under section 108 of the Customs Act, 1962. Dang was alleged to have facilitated Tulsi Das and Kunal Kamra in importing undervalued goods by providing names of firms/IECs in contravention of section 7 of the FTDR Act, 1992, rendering the goods liable to confiscation under section 111(d) and himself liable to penalty under section 112(ii). By order dated 10.03.2023, the Principal Commissioner recorded in paragraph 116 that penalty under section 112(ii) was imposable on Dang (section 114A not being imposable as duty was not demanded from him), but in the operative paragraph 118(ix) imposed a penalty of Rs. 50,000 under section 114AA. The department appealed against this order.

Key provisions

• Section 112(ii), Customs Act, 1962 — Penalty for improper importation of goods
• Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
• Section 114A, Customs Act, 1962 — Penalty for short-levy or non-levy of duty in certain cases
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 7, The Foreign Trade (Development and Regulation) Act, 1992 — Importer-exporter Code Number.