2017 (3) TMI 1118 - AT - Customs

Customs Act Penalty Appeal Granted: Insufficient Evidence, Jurisdiction Addressed, Precedents Analyzed

The Tribunal allowed the appeal, setting aside the penalty imposed on the appellant under section 112(b) of the Customs Act, 1962, due to insufficient ... Imposition of penalty u/s 112(b) of the CA, 1962 - alleged involvement in enabling the unit to file bill of entry through an agent at Mumbai in the absence of their own licence which appear to have been cancelled - whether the penalty rightly imposed u/s 112 in view of the facts and circumstances of the case? - Held that: - There is no evidence that the goods which have been confiscated were from either of these consignments and, that too, connected remotely with the appellant - In the absence of evidence of direct knowledge of misuse of the goods after importation, the invoking of section 112 of the CA, 1962, which is applicable only to such goods as are held liable to confiscation, is questionable - appeal allowed - decided in favor of appellant-CHA. Issues:1. Imposition of penalty under section 112(b) of the Customs Act, 1962 on the appellant.2. Jurisdiction of the Tribunal in the dispute.3. Alleged involvement of the appellant in enabling a unit to file bill of entry.Analysis:1. The appellant, a holder of a Customs House Agent license, was penalized under section 112(b) of the Customs Act, 1962 based on allegations of connivance in high sea sales of fabric to a 100% export oriented unit. The impugned order relied on statements implicating the appellant. The Tribunal considered precedents like Halliburton Offshore Services and M K Industries to assess the penalty. However, the Tribunal found the lack of evidence connecting the confiscated goods to the appellant directly, leading to doubts regarding the applicability of section 112 in this case. Consequently, the Tribunal set aside the impugned order concerning the appellant.2. The Tribunal noted a jurisdictional issue in the dispute, as the records were transferred to the Principal Bench but listed for hearing at Mumbai. Despite the initial lack of jurisdiction, the Tribunal proceeded to decide the issue due to the disposal of the stay application by a Division Bench in Mumbai. This procedural discrepancy did not hinder the Tribunal from addressing the substantive matter at hand.3. The appellant was accused of enabling a unit to file a bill of entry through an agent in Mumbai after the unit's license was canceled. The Tribunal examined whether this act fell within the scope of section 112 of the Customs Act, 1962. Referring to the decision in Halliburton Offshore Services, the Tribunal highlighted the importance of evidence linking the appellant to the misuse of imported goods. In this case, the lack of direct evidence connecting the confiscated goods to the appellant raised doubts about invoking section 112 against the appellant. Consequently, the Tribunal set aside the impugned order concerning the appellant.In conclusion, the Tribunal allowed the appeal, setting aside the penalty imposed on the appellant under section 112(b) of the Customs Act, 1962, due to insufficient evidence linking the appellant to the confiscated goods. The jurisdictional issue did not prevent the Tribunal from addressing the substantive matter, and the decision was based on a thorough analysis of relevant legal precedents and the specific circumstances of the case.