2015 (7) TMI 300 - AT - Customs

Customs penalty overturned for CHA due to lack of evidence

M/s OTA Falloons Forwarders Pvt Ltd Versus Commissioner of Customs (Port), Kolkata

M/s OTA Falloons Forwarders Pvt Ltd Versus Commissioner of Customs (Port), Kolkata - TMI Issues:- Imposition of penalty under Section 112 of the Customs Act, 1962 based on tampering with import license and diversion of goods.- Allegations against the Customs House Agent (CHA) for involvement in the clearance process.- Comparison with a similar case where penalty against CHA was dropped.Analysis:1. Imposition of Penalty: The case involved the imposition of a penalty under Section 112 of the Customs Act, 1962 due to tampering with the import license and diversion of goods by the importer. The importer, representing themselves as a manufacturer exporter, had tampered with the import license to clear goods with a reduced bank guarantee. The Commissioner of Customs imposed a penalty of &8377; 10.00 lakhs on the Appellant, a Customs House Agent (CHA), for their involvement in the clearance process.2. Allegations against the CHA: The Appellant, a CHA, was accused of receiving documents from the importer through a representative, completing necessary formalities, and handing over the papers for obtaining the necessary signature of the importer. Despite the Executive Director of the Appellant Company disclosing details during the investigation, including the involvement of the representative, Shri S. L. Sharma, no further investigation was conducted by the Department. The Appellant did not file a reply to the show-cause notice, leading to the imposition of the penalty by the Commissioner (Appeals).3. Comparison with Previous Case: The Appellant's consultant argued that a previous Tribunal decision in a similar case had dropped the penalty against a CHA, citing lack of evidence linking the CHA to the tampering of the import license or the diversion of goods. The Revenue, represented by the ld. A. R., acknowledged the similarity in facts between the previous case and the present one but failed to present any contrary judgment. The Tribunal, after hearing both sides and examining the records, referred to the previous case where penalties on the appellants were not substantiated due to lack of evidence linking them to the wrongdoing.In conclusion, the Tribunal set aside the impugned order to the extent of the penalty imposed on the Appellant, following the decision in the previous case. The appeal was allowed, providing consequential relief as per the law. The judgment highlighted the importance of evidence linking a CHA to any wrongdoing and emphasized the need for a thorough investigation before imposing penalties under the Customs Act, 1962.