JUDGMENT : S. Manikumar,J. 1. Civil Miscellaneous Appeal is filed against the order made in final order No.112/2008, on the file of the CESTAT, Madras, dated 18/2/2008, on the following substantial questions of law:- “1. Whether the first respondent is correct in observing that the payment made by the appellants was not under protest when the ruling of the Hon'ble Supreme Court is in favour of the appellants? 2. Whether the first respondent was correct in imposing penalty to the tune of Rs.5,00,000/- when the entire demand was set aside and more particularly when it was held that extended period of limitation was not invocable for demanding duty. When the demand itself was quashed holding that there can be no case for the department that appellants had suppressed material facts with intent to evade payment of duty. The imposition of penalty, under these circumstances is illogical. 2. Facts culled out from the material on record are that the appellant is engaged in the manufacture of automotive instruments and sensors. They had imported three items, viz., mould inserts, head drills and injection moulds during the period October 1989 to October 1994. The design, drawing and technical information required for manufacture of finished goods out of these imported item were also procured from the supplier. However, the value of design, drawings and technical information was not included in the assessable value of the imported goods. The Bills of Entry covering mould inserts were filed during the period 16/10/1989 to 29/4/1991, the Bill of Entry covering head drills was filed on 23/11/1991 and the Bills of Entry covering injection moulds were filed during November 1993 to October 1994. After conducting investigation with regard to the valuation of the goods, the department issued a show cause notice dated 6/5/1998 to the assessee by invoking the extended period of limitation on the ground of alleged suppression of facts. By the time, differential duty had been paid by the manufacturer during the course of investigation, on 13/8/1993, a fact noted in the show cause notice itself. 3. M/s. Premier Instruments & Controls Ltd., contested the demand. By the time, differential duty had been paid by the manufacturer during the course of investigation, on 13/8/1993, a fact noted in the show cause notice itself. 3. M/s. Premier Instruments & Controls Ltd., contested the demand. While adjudicating of the dispute, Commissioner of Customs appropriated the aforesaid payment towards the demand of differential duty under the proviso to Section 28 (1) of the Customs Act, 1962, imposed a penalty of Rs.10 lakhs on M/s. Pricol under Section 112 (a) of the Act, and imposed a penalty of Rs.1.00 lakh on their CHA viz., M/s. Visa Exim Corporation. In appeals filed by M/s. PRICOL and their CHA against the Commissioner's order, vide Order dated, 18/2/2008, Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, reduced the penalty to Rs.5,00,000/- and thus allowed the duty portion. Aggrieved by the remaining portion of penalty, M/s. Premier Instruments and Controls Ltd., Coimbatore, has filed the instant appeal. 4. Supporting the substantial questions of law, Mr.S.Venkatachalam, learned counsel for the appellant submitted that when a sum of Rs.25 lakhs, vide Demand Draft dated 13/8/1993 has been paid, even during the investigation stage and before the show cause notice, the same amounts to payment under protest, in the light of the decision of the Hon'ble Supreme Court, in Mafatlal Industries Ltd., Vs. Union of India, reported in 1997 (89) ELT 247 (SC). Learned counsel for the appellant further submitted that when CESTAT, Madras, has set aside the duty demand, question of payment of penalty does not arise, and therefore, prayed to set aside the impugned order. 5. Learned counsel for the appellant further submitted that value declared by the appellant was only a mistake and not intentional which the Tribunal failed to take note of, at the time of passing Final Order. In this context, he referred to the reply, dated 6/10/1998, wherein the assessee has stated as hereunder:- “Taking the above into account, we request you to drop all further proceedings in terms of the above show cause notice. Also we request that out of Rs.25 lakhs paid as pre deposit by us after deducting Rs.12,06,874/- and Rs.18,804/- towards duty for Inserts for Gear and Drill Head, the balance amount may be refunded to us.” 6. Also we request that out of Rs.25 lakhs paid as pre deposit by us after deducting Rs.12,06,874/- and Rs.18,804/- towards duty for Inserts for Gear and Drill Head, the balance amount may be refunded to us.” 6. Opposing the prayer sought for, Mr.S.Rajasekar, learned counsel for the revenue submitted that when mis-declaration of value had been conceded, applicability of Section 111 of the Customs Act, is automatically attracted, for confiscation and consequently, Section 112 of the Customs Act is also attracted for imposition of penalty. He further submitted that though the Tribunal went against the revenue, on the issue of extended period of limitation, when mis-declaration of value had been admitted, imposition of penalty is a stand alone procedure which need not be set aside. 7. Heard the learned counsel for the parties and perused the materials available on record. 8. Before adverting to the rival submissions, a cursory look at Section 111 (m) and 112 is required and the same are extracted hereunder:- (i). Section 111 (m) of the Customs Act, 1962, reads thus:- "Any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of Section 54." (ii). Section 112 of the Customs Act, 1962, reads thus:- "Penalty for improper importation of goods, etc - Any person, a. who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or b. who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111, shall be liable - (i). in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii). in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii). in the case of dutiable goods, other than prohibited goods, subject to the provisions of Section 114 - A, to a penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher: Provided that where such duty as determined under sub-Section (8) of the Section 28 and the interest payable thereon under Section 28 AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty five per cent of the penalty so determined. (iii). in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under Section 77 (in either case hereinafter in this section referred to as the declared value is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is greater; (iv). in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v). in the case of goods falling both under clauses (ii) and (iii) to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 9. Though the CESTAT, Madras was satisfied that the extended period of limitation was not invocable for demanding duty, on the aspect of imposition of penalty, the Tribunal on the facts and circumstances of the case, at paragraph No.4, of the final order in No.112 of 2008, dated 18/2/2008, held as follows:- “However, the question relating to penalty is altogether a different question. The impugned penalty is under Section 112 of the Customs Act and the same is on the ground that M/s. PRICOL rendered the goods liable to confiscation under Section 111 of the Customs Act by misdeclaring its value. Duty liability was conceded at the stage of investigations, which means, the allegation of misdeclaration of value stands conceded. If that be so, Section 111 (m) of the Customs Act, gets attracted for confiscation of the goods and consequently Section 112 of the Act gets attracted for penalty on the importer. Hence M/s. PRICOL cannot resist the penalty imposed on them. Contextually, we may observe that there is no period of limitation for confiscation related penalties like the one imposed under Section 112 of the Customs Act. However, we do not think that learned Commissioner ought to have imposed such a harsh penalty as s.10.00 lakhs on the assessee. In the facts and circumstances of the case, we reduce it to Rs.5,00,000/-. 10. As per Section 111 (m), any goods which do not correspond in respect of value or in any other particular with the entry made under the Customs Act, 1962, Section 77 in respect thereof, or in the case of goods under transhipment referred to in the proviso to sub-Section 1 of Section 54 of the Customs Act, 1962, the same are treated as improperly imported goods and attract confiscation. 11. As per Section 112 A of the Customs Act, 1962, any person, a. who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or b. who acquires possession of or is in any way concerned in carrying removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111, shall be liable - (i). in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty (not exceeding the value of the goods or five thousand rupees), whichever is the greater. 12. in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty (not exceeding the value of the goods or five thousand rupees), whichever is the greater. 12. Though before the adjudicating authority, the appellant had contended that it was not the case of mis-declaration but only by mistake, the Commissioner of Customs, Airport, in the order in Original dated 24/9/2000 has recorded a categorical finding as hereunder:- The next allegation is that they mis-declared certain “inserts for gears” as “plastic injection mould cavities” and availed the benefit of Notification No.314/85-Cus. In this case, they have admitted the mis-declaration and evasion of duty to the extent of Rs.12,06,874/-.” 13. Finding of fact recorded by the adjudicating authority, viz., Commissioner of Customs (Pondicherry), 24/9/2000 has been confirmed by CESTAT, Madras. 14. There is a concurrent finding of fact of mis-declaration of the value, and consequently, Section 111 (m) of the Customs Act, gets attracted. Section 112 of the Customs Act which provides for penalty follow. 15. Though CESTAT was empowered to impose a penalty, not exceeding the value of the goods of Rs.5,000/-, whichever is greater, in the case on hand, considering the quantum of penalty of Rs.10,00,000/- on the assessee, CESTAT has reduced the same to Rs.5 lakhs. 16. On going through the material on record, we are of the view that the appellant has not made out a case for interference and substantial question of law raised is answered against the assessee. 17. Accordingly, this Civil Miscellaneous Appeal is dismissed. No costs.