2016 (11) TMI 1141 - AT - Customs

Penalties Set Aside for CHA Firm in Customs Act Case

Unisons Cearing Pvt. Ltd. Pall Singh Lohia, Director Versus CC, Amritsar

The court set aside penalties imposed on a Clearing House Agent (CHA) firm under Section 112 of the Customs Act for alleged involvement in fraudulent ... Imposition of penalty u/s 112 of Customs Act - CHA - fraudulent activities - Held that: - there is no direct evidence on record showing that Unisons Clearing Pvt. Ltd. which is a CHA firm, was directly involved in the fraudulently activity of importers. The adjudicating authority has observed that neither importer knew the appellant nor the appellant has signed any document and it was only their employees who were creating the problem and the mischief. In the absence of any direct involvement of the appellant, showing that they were aiding and abetting and associated with the importer, the imposition of penalty upon by them cannot be sustained - penalties set aside - appeal allowed - decided in favor of assessee. Issues:- Imposition of penalty under Section 112 of Customs Act on CHA firm for involvement in fraudulent import activities.Analysis:1. The appeals and stay applications were filed against the impugned order, and due to the narrow compass of the issue, all appeals were taken together for a common decision.2. All appeals were disposed of together as the issue and penalty imposed under Section 112 of the Customs Act were identical in each case.3. The impugned order highlighted the role of a clearing agency and an individual in fraudulent activities related to import. The agency denied connivance and stated that their employee was responsible for forging signatures and committing fraud. The adjudicating authority noted the lack of direct evidence implicating the agency in the fraudulent activities.4. The adjudicating authority observed that there was no direct involvement of the clearing agency in the fraudulent activities, as the employees were solely responsible. Citing a previous Tribunal decision, the penalty imposed on the agency was set aside as there was no evidence of aiding or abetting the importers.5. Based on the lack of direct involvement and evidence against the clearing agency, the imposition of penalties was deemed unsustainable, and all appeals were allowed with consequential relief to the appellant.6. The decision was dictated and pronounced in court, allowing the appeals and stay applications.This judgment dealt with the imposition of penalties on a Clearing House Agent (CHA) firm for its alleged involvement in fraudulent import activities. The adjudicating authority found that the agency was not directly involved in the fraudulent actions but rather their employee was solely responsible. Relying on the lack of evidence showing the agency's complicity in aiding or abetting the importers, the penalties imposed under Section 112 of the Customs Act were set aside. The decision emphasized the importance of direct involvement and evidence in imposing penalties on entities involved in import activities, ultimately allowing all appeals and stay applications in favor of the appellant.