2014 (6) TMI 229 - AT - Customs

Tribunal overturns penalties for agent & director under Customs Act, 1962, stressing signatory verification

The Tribunal overturned the penalty imposed on the Customs House Agent and Managing Director under the Customs Act, 1962, finding they were not ... Penalty u/s 114 on CHA - Certain unscrupulous exporters exported certain goods by overvaluing and claimed drawback was sanctioned. However, later on, the goods were detained subject to investigation. - Some of these export consignments were in the name of the present appellant-CHA. - Held that:- From the time of initial investigation itself, Shri C.K. Dawar has clarified that they have never handled the export consignments in question. He had produced various registers detailing various export consignments handled by them and the present exporters were not their clients. It is also observed that the annexures which are purported to be signed by Shri Sachin Devgire. It is also noted that Shri Sachin Devgire was only a G-Card Pass holder and he was not authorized to sign such documents. In view of the above position, the appellants cannot be held responsible and penalty cannot be imposed upon them under Section 114(iii) of the Customs Act, 1962. As far as the second appellant is concerned, investigation has not brought out any role whatsoever and therefore penalty imposed on him is not correct - Decided in favour of appellant. Issues Involved:Misuse of export-friendly procedure, Responsibility of agents, Imposition of penalty under Customs Act, 1962Analysis:The case involved a Customs matter where certain exporters overvalued goods and claimed drawback. The first appellant, a Customs House Agent (CHA), and the second appellant, the Managing Director, were implicated as some export consignments were in the name of the first appellant. The appellants denied any involvement and stated that their employee, Shri Sachin Devgire, was misused by another person, Shri Shiv Kumar, to handle the consignments. The appellants contended that they followed all Customs laws and did not deal with undesirable exporters. They cooperated with the investigation and claimed they were not responsible for the actions of their agent.The Adjudicating Authority found the appellants responsible for the actions of their employee, Shri Sachin Devgire, as he was under their employment. However, the Tribunal, after reviewing the submissions and the impugned order, observed that the appellants had produced evidence showing they were not involved in handling the export consignments in question. It was noted that Shri Sachin Devgire, a G-Card Pass holder, was not authorized to sign the documents in question. Therefore, the Tribunal held that the appellants could not be held responsible for the actions of Shri Sachin Devgire and overturned the penalty imposed under Section 114(iii) of the Customs Act, 1962. The Tribunal also ruled that the second appellant had no role in the matter, and thus, the penalty imposed on him was incorrect. Consequently, all the appeals were allowed in favor of the appellants.In conclusion, the Tribunal found that the appellants were not involved in the misuse of the export-friendly procedure and were not liable for the actions of their employee beyond his authorized capacity. The Tribunal's decision highlighted the importance of verifying the authority of individuals signing shipping documents and emphasized that penalties should only be imposed when there is clear evidence of wrongdoing by the parties involved.