2023 (2) TMI 284 - AT - Customs

Customs Act penalty appeal: waiver application rejected, High Court intervention, vicarious liability, duty evasion findings set aside

The case involved a challenge by M/s Forbes and Company Limited against the imposition of a penalty under section 112(a) of the Customs Act, 1962. The ... Penalty u/s 112(a) of Customs Act, 1962 on steamer agent - Confiscation of vessel - evasion of duty with acts of omission and commission - HELD THAT:- There is no doubt that, in accordance with section 148 of the Customs Act, 1962, the steamer agent, as the appellant herein is, assumes full responsibility on behalf of person-incharge of conveyance for compliance with chapter VI of Customs Act, 1962. It is on record, however, that the confiscation of the said vessel for alleged violations of chapter VI of Customs Act, 1962 as well as the duty liability arising from misuse of ‘ship stores’ and ‘bunkers’ in the findings of the adjudicating authority had been set aside by the Tribunal. In such circumstances, the related act of wrong-doing urged by the Learned Authorised Representative has ceased to be and consequently there is no scope for imposition of penalty under section 112 of Customs Act, 1962 on the representative of person-in-charge of conveyance. Appeal allowed. Issues:- Imposition of penalty under section 112(a) of Customs Act, 1962 by Commissioner of Customs, Cochin- Dismissal of appeal due to non-compliance with pre-deposit requirement under section 129 E of Customs Act, 1962- Rejection of application for waiver of pre-deposit by the Tribunal- Restoration of appeal by the Hon'ble High Court- Vicarious liability of steamer agent for violations under Customs Act, 1962- Justification for continuation of penalty post primary finding effacementAnalysis:Imposition of Penalty under Section 112(a) of Customs Act, 1962:The case involved a challenge by M/s Forbes and Company Limited against the imposition of a penalty of Rs. 1,00,00,000 under section 112(a) of the Customs Act, 1962. The penalty was imposed by the Commissioner of Customs, Cochin. The appeal was initially dismissed due to non-compliance with the pre-deposit requirement under section 129 E of the Customs Act, 1962.Dismissal of Appeal and Rejection of Waiver Application:The Tribunal rejected the application for waiver of the pre-deposit by M/s Forbes and Company Limited, leading to the dismissal of the appeal. Subsequent attempts by the appellant to recall the dismissal were also unsuccessful. The appellant argued that the dismissal of the appeal without specifying the amount to be deposited for compliance was inappropriate.Restoration of Appeal by the Hon'ble High Court:The Hon'ble High Court intervened in the matter and restored the appeal before the Tribunal. It was observed that the dismissal of the appeal without considering the merits due to non-compliance with the pre-deposit requirement was not the correct approach. The High Court directed the Tribunal to reconsider the appeal.Vicarious Liability of Steamer Agent:The appellant, a steamer agent, was held vicariously liable for violations under the Customs Act, 1962 related to 'stores', 'spares', and 'bunkers'. The appellant was accused of enabling the vessel to stay in Indian waters for an extended period, leading to duty evasion. However, the Tribunal later set aside the findings of duty evasion, thereby questioning the basis for imposing penalties on the appellant.Continuation of Penalty Post Primary Finding Effacement:The Tribunal's decision to allow the appeals of other parties involved in the same proceedings, which led to the effacement of the primary finding justifying the penalty, raised questions about the justification for continuing the penalty against the appellant. The Tribunal ultimately set aside the impugned order and allowed the appeal, emphasizing that the basis for imposing the penalty no longer existed.This detailed analysis covers the various issues addressed in the legal judgment, highlighting the key arguments, decisions, and implications for each aspect of the case.