Tribunal rules no penalty under Customs Act. Appeals allowed, appellants granted relief.

The Tribunal held that no penalty was attracted against the appellants under Section 114 of the Customs Act, 1962. The Appeals filed by the appellants were allowed with any consequential relief.

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Issues:
Penalty imposition under Sec. 114 of the Customs Act, 1962 on appellants for not verifying correctness of exports.

Analysis:
The Appeals were filed against the Order-in-Original imposing a penalty of Rs. 5.00 lakhs each on the appellants under Sec. 114(i) of the Customs Act, 1962. The argument presented by Shri S.K.Mehta, Advocate, was that the appellant Shri S.Santra, acting on behalf of the CHA, did not receive any extra consideration for the assigned work, hence no penalty should be imposed. This argument was supported by citing relevant case laws. On the other hand, Shri S.Bhattacharya, Advocate for appellant Shri Subhas Bose, argued that lack of authorization from the exporter does not establish the appellant's knowledge of fraudulent intentions, and no extra consideration was received. The advocate relied on specific case laws to support this argument.

Shri S.K.Naskar, AC(AR) for the Revenue, argued that necessary verification was not done by both appellants to establish the correctness of exports, and penalties were correctly imposed based on the Order-in-Original. However, upon hearing both sides and examining the case records, the Tribunal considered whether penalties could be imposed under section 114 of the Customs Act, 1962. It was found that the appellants had no knowledge that the goods in the containers were different from what was declared in the shipping bills. The inability to take precautions could lead to action under CHA licensing regulations but not to impose penalties under section 114 of the Customs Act, 1962.

The Tribunal's decision was supported by case laws cited by the appellants, particularly referencing a case where penalties were set aside for employees who were not aware of the provisions of the law. The Tribunal held that no penalty was attracted against the appellants under Section 114 of the Customs Act, 1962. Consequently, the Appeals filed by the appellants were allowed with any consequential relief.

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