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of <h1>Court overturns penalty on clearing house agent under Customs Act section 114(i); emphasizes lack of knowledge and inconsistent treatment.</h1> The court overturned the Tribunal's decision to impose a penalty under section 114(i) of the Customs Act on the clearing house agent. The judgment ... Penalty u/s 114(i) of Customs Act - export of non-Basmati Rice - Since the export of Non-Basmati is prohibited by DGFT by notification No.93(RE207)/2004/09 dated 1.4.208, therefore, 135 MT of Non-Basmati rice found in five containers valued at Rs. 71,87,400/- were placed under seizure on 6.3.2009 and given in safe custody. - Held that:- The finding arrived at by the Tribunal with regard to connivance between the appellant and exporter is based on no evidence. As a matter of fact, the Commissioner as well as the Tribunal assumed the fact of connivance. The Tribunal has relied on para 10.2 of the trade notice. This paragraph provides that stuffing of container shall be done in presence of Customs house officer and other representative. If the Customs House Officer was not present and the stuffing was carried out, then it was wrong committed on part of the respondent as no stuffing could be permitted in view of paragraph 10.2 in absence of Customs Officer. Instead of fixing the responsibility on the Customs Officer, the Tribunal has shifted the liability on the clearing house agent, when a specific case of the clearing house agent was that he or his representative were not present at the time of stuffing. No mens rea can be attributed to the appellant nor the appellant could be said to have abetted in exporting of prohibited rice - Penalty levied by the Commissioner of Customs and confirmed by the CESTAT against the appellant is set aside. - Decided in favor of assessee. Issues:1. Whether the Tribunal committed an error in confirming the penalty under section 114(i) of the Customs Act without considering certain facts.2. Whether the appellant, a clearing house agent, can be held liable for the export of prohibited Non-Basmati rice without knowledge.3. Discrepancies in judgments between different cases involving similar circumstances.Issue 1:The case involved the confirmation of a penalty under section 114(i) of the Customs Act by the Tribunal without considering that a 'Let Export Order' had been issued by the department after examining the goods. The appellant argued that the penalty was unjust as they had no knowledge of the Non-Basmati rice being exported.Issue 2:The appellant, a clearing house agent, contended that they were unaware of the goods being Non-Basmati rice instead of Basmati rice as declared. The Tribunal in a related case had set aside a penalty on similar grounds, citing lack of evidence of the agent's awareness. The appellant's defense was that they acted in good faith and could not be held liable for the exporter's mistake.Issue 3:Discrepancies arose as the Tribunal granted benefit in a similar case involving identical circumstances but affirmed the penalty in this case. The appellant argued that no evidence supported the assumption of connivance between them and the exporter or CFS, and that the responsibility was wrongly shifted to them. The appellant's lack of knowledge and absence of mens rea in exporting prohibited rice were emphasized, with the judgment highlighting inconsistencies in treating similar cases differently.In a detailed analysis, the judgment scrutinized the appellant's role as a clearing house agent, emphasizing their lack of knowledge regarding the nature of the exported goods. The Tribunal's decision to impose a penalty was overturned based on the absence of evidence proving the appellant's awareness or abetment in exporting Non-Basmati rice. The judgment underscored the importance of mens rea in imposing penalties under the Customs Act and criticized the presumption-based approach taken by the Commissioner and CESTAT. The discrepancies in judgments between cases with parallel circumstances were highlighted, with the court ultimately setting aside the penalty against the appellant, ruling in their favor, and ordering each party to bear their own costs.
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