2018 (5) TMI 73 - AT - Customs

Tribunal Overturns Penalties for Exporting Prohibited Goods

Daroowala Bros & Co. Shri Pervez J. Irani Versus Commissioner of Customs (Gen.), Mumbai

The Tribunal set aside penalties imposed on a Customs House Agent (CHA) and an individual for attempting to export prohibited goods under Section 114(i) ... Penalty u/s 114(i) of Customs Act, 1962 on CHA - penalty imposed on the ground that they filed shipping bills in respect of prohibited goods - Held that: - appellant being CHA has filed shipping bills only on the basis of documents provided to them by the exporter. The appellant were not aware about the technical characteristic of product, therefore it cannot be said that appellant have knowingly attempted to clear prohibited goods for export - appellant being CHA having limited role for filing the shipping bill that too on basis of documents provided to them cannot be held guilty for attempting the export of prohibited goods - penalty set aside. Penalty on Shri. Pervez Irani, partner of CHA firm - Held that: - reliance placed in the case of Eagle Impex vs. CC, Kandla [2017 (2) TMI 49 - CESTAT AHMEDABAD], where it was held that separate penalties on partners or authorised signatories are not warranted, when penalties have been imposed on the appellant partnership/proprietor firms - penalty on partner not warranted. Appeal allowed - decided in favor of appellant. Issues:Penalty imposed under Section 114(i) of Customs Act, 1962 on CHA and individual for attempting to export prohibited goods.Analysis:The case involved an appeal against the penalty imposed on a Customs House Agent (CHA) and an individual for attempting to export prohibited goods. The appellant, represented by counsel, argued that they had no knowledge of the nature of the goods being prohibited and had filed shipping bills based on documents provided by the exporter. The appellant claimed they had no malafide intentions and should not be held liable for any penalty. It was highlighted that the exporter's statement did not implicate the appellant in the export of teakwood, indicating a lack of knowledge on the appellant's part. The appellant's limited role as a CHA in preparing the check list based on export documents was emphasized, asserting that they were not aware of the goods being prohibited for export.The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order, emphasizing the penalty imposed on the appellants for filing shipping bills in respect of prohibited goods. However, the Tribunal, after considering the submissions and perusing the records, found that the appellants, being CHA, had filed shipping bills solely based on the documents provided by the exporter. It was concluded that the appellants did not knowingly attempt to clear prohibited goods for export, as they were not aware of the technical characteristics of the product. The Tribunal noted that the exporter's statement did not implicate the appellants in misdeclaration, and the appellants themselves stated they were unaware of the goods being prohibited. Consequently, the Tribunal held that the appellants, having a limited role and lacking knowledge about the prohibited goods, should not be held guilty for attempting to export such goods.Moreover, regarding the penalty on the individual partner of the CHA firm, it was cited that penalties cannot be imposed on partners of CHA firms, as established in various judgments. Citing precedents such as Eagle Impex vs. CC, Kandla, Sunshine Overseas vs. CCE&ST, Surat, and Amritlakshmi Machine Works vs. CC(I), Mumbai, the Tribunal set aside the penalties imposed on the appellants and allowed the appeals with consequential relief, if any, in accordance with the law. The judgment was pronounced in court on 26/04/2018.