Page 202 - ELT_1st August 2020_Vol 373_Part 3

384 EXCISE LAW TIMES [ Vol. 373

Commissioner imposed penalty of Rupees Ten Crores. The Appeals filed by the
Respondents were taken up by the Tribunal. The Tribunal, after referring to the
rival contentions held that the Respondents were liable for penalty under Section
112A of the Customs Act. The Tribunal however reduced the penalty from
Rs. 10,00,00,000/- to Rs. 1,00,000/- observing thus :-
“However, looking into the facts and circumstances of the case including
that appeals against the main company and one of the Directors have been
abated, in our view, the ends of justice will be met, if penalty is reduced
from Rs. 10.00 crores to Rs. 1.00 lakh on the each appellants. We order ac-
cordingly.”
It is the contention of the Appellant that this order is entirely non-speaking and
perverse, while it is the contention of the Respondents that considering the back-
ground facts, the order is correct and should not be interfered with. It is contend-
ed by the Respondents that the reasons are given in the order about the abate-
ment of Appeals against the Company and one of the Directors.
6. That the Tribunal would have discretion to fix the quantum of penal-
ty can not be disputed, but such exercise cannot be a arbitrary one. The Commis-
sioner, after considering all these circumstances had imposed penalty of Rupees
Ten Crores. If it has to be brought down to Rupees One Lakh, the Tribunal was
under obligation to give detailed reasoning thereof. That the Appeals against the
Company and Directors have abated was one of the factors for the use of discre-
tion, but in absence of statutory provisions mandating reduction in penalty on
this ground, other factors for the use of discretion also had to be considered.
From the perusal of the order passed by the Commissioner it does appear that
there were various other parameters which should have been taken into consid-
eration while fixing the amount of penalty. Since there is an absence of consider-
ations of all the parameters the question of law as reframed will have to be an-
swered in favour of the Appellant.
7. Accordingly the Appeals are allowed. The impugned order dated 13
March, 2019 to the extent it reduces the penalty from Rupees Ten Crores to Ru-
pees One Lakh is quashed and set aside.
8. The Appeals No. C/919 and 921/2009 stand restored to the file of the
Tribunal, only on the aspect of fixation of the quantum of penalty. We make it
clear that we are not interfering with the findings of the Tribunal that the Re-
spondents are liable for penalty under Section 112A. We also make it clear that as
what is stated in this order is only to stress on the absence of reasoning and we
have not commented on the merits of the matter as it will be within the domain
of the Tribunal to fix the penalty after giving the reasons for the same.
9. Keeping all the contentions of the parties on this aspect open, the
Appeals are disposed of as above.

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EXCISE LAW TIMES  1st August 2020  202