Judgment:
encompassed all the goods seized or cleared from the Ranibagh factory and accordingly the penalty imposed by the Commissioner, Meerut covered the watches seized at Delhi also; that penalty cannot be imposed twice for the same offence as it tantamouts to double jeopardy.
3. Countering the arguments, Shri M.M. Dubey, learned D.R. submitted that the appellants have not raised this plea that the penalty cannot be imposed under Section 112 of the Customs Act before the Adjudicating authority and as such they cannot raise a new plea before the Appellate Tribunal. He, further, submitted that provisions of Section 111(d) and 111(p) were invoked in the show cause notice issued in this matter and as such the penalty can be imposed under Section 112 of the Customs Act, of IB cases, dials and hands which were smuggled into the country from France and as such the watch parts which were smuggled into India were liable for confiscation under Section 111(d) and 111(p) which will invite imposition of penalty under Section 112 of the Customs Act. He also reiterated the findings of the Commissioner of Customs. He also reiterated the findings of the Commissioner of the question of Appellants being penalised as contained in para 444 of the impugned order which has already been referred to by the learned Advocate.
Finally the learned D.R. submitted that the Commissioner is competent to invoke penalty under Section 117 of the Customs Act and it is settled law that if the exercise of power can be traced to a legitimate source the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. Reliance was placed on the decision in the case of J.K. Steel Ltd. vs. U.O.I., 1978(2) ELT J335 (SC). He also relied upon the decision in the case of N. B. Sanjana, Asstt. Collector vs.
Ellphinstone Spg. & Wvg. Co. Ltd., 1978(2) ELT J399 wherein it was held that if the authorities have the powers to issue notice either under Rule 10 or Rule 9(2), the fact that the notice refers subsequently to a particular Rule which may not be applicable will not make the notice invalid. He, therefore, contended that in any case the penalty under Section 117 of the Customs Act will be imposable on all the Appellants.
4. We have considered the submissions of both the sides. The present appeals are only in connection with the seizure and confiscation of 2823 wrist watches which were manufactured out of parts said to have been smuggled into country. The learned Advocate for the Appellants has emphasised that all these appellants have been penalised for smuggling watch parts into the country under Section 112 of the Customs Act by Commissioner of Customs, Meerut under adjudication Order No. 35/95 dated 19.4.94. This fact has not been rebutted by the learned D.R. we do not find any substance in the submission of the learned D.R. that the provisions of Section 111(d) and (p) were mentioned in the show cause notice and as such penalty was imposable under Section 112 of the Act. When the impugned Order deals with the watches which though manufactured out of smuggled parts cannot be equated with parts itself so as to warrant imposition of penalty under Section 112 of the Act.
The provisions of Section 112 are very specific as the penalty is imposable only when the goods are liable for confiscation under Section 111 of the Customs Act. As the goods are not liable for confiscation under Section 111 in the present matters, penalty cannot be imposed under Section 112. This was the view held by the Tribunal in the case of Maersk India Ltd., supra. Accordingly, we set aside the penalty imposed on all the Appellants under Section 112 of the Act. The learned D.R. has further contended that in any case as the collector was competent to impose the penalty under Section 117 of the Customs Act and opportunity has been given to the Appellants to show cause as to why penalty should not be imposed on them, mentioning of wrong rule should not come in the way of imposing penalty under Section 117.
Without going into the question of imposing the penalty under Section 117 of the Customs Act we are of the view that all the Appellants have been imposed penalty for smuggling of the wrist watch parts by the Commissioner of Customs, Meerut and it will be not in the interest of justice that a separate penalty is imposed on them in respect of wrist watches which have been undisputedly manufactured out of those smuggled watch parts. Accordingly, we set aside the impugned order regarding penalty on all the Appellants herein and allow all the appeals.