Customs House Agent not liable for mis-declaration of goods; Tribunal overturns penalty decision

The Appellate Tribunal CESTAT MUMBAI ruled in favor of the Customs House Agent (CHA) in a case involving mis-declaration of goods. The CHA was initially penalized for aiding in the mis-declaration of jewellery items as gold mounting to claim duty exemption. However, the Tribunal found that the responsibility for declaration rested with the importer, not the CHA. As there was no evidence of the CHA aiding or abetting in the mis-declaration, the penalty under Section 112(a) was set aside, and the appeal was allowed in favor of the CHA.

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Issues: Mis-declaration of goods leading to penalty imposition under Section 112(a) of the Act.

The judgment by the Appellate Tribunal CESTAT MUMBAI involved a case where the appellant, a Customs House Agent (CHA), had filed a Bill of Entry on behalf of a client for a consignment of jewellery items declared as gold mounting to claim exemption under Notification No. 62/2004 (Cus). The Customs department found that the goods were mis-declared as jewellery with mounting rings attached, instead of being just mounting. Consequently, the CHA was held liable for aiding and abetting in the mis-declaration and was penalized with confiscation of goods, a redemption fine, and a penalty of Rs.50,000 under Section 112(a) of the Act.

The appellant contended that they acted bona fide by following the importer's instructions, who had admitted to instructing the CHA to declare the goods as gold mounting for claiming duty exemption. The appellant argued that since the responsibility for declaration rested with the importer, there was no case of aiding or abetting against the CHA. Reference was made to a Supreme Court ruling where a similar situation was considered, emphasizing that mere reliance on an exemption notification that did not apply to the goods did not constitute intentional evasion of duty.

The Appellate Tribunal, after considering the arguments, concluded that the importer bore the responsibility for the declaration in the Bill of Entry. As there was no evidence of the CHA aiding or abetting in the mis-declaration, the penalty imposed under Section 112(a) was set aside. The appeal was allowed in favor of the appellant, granting consequential relief. The stay application was also disposed of accordingly.

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