Tribunal upholds penalty for Customs Act violation but discharges Appellant due to missing charge notice

The Tribunal upheld the penalty imposed under Section 112(a) of the Customs Act, 1962, finding the Appellant liable for facilitating mis-declaration in the import of Chinese Batteries. However, the Tribunal discharged the Appellant from the penalty under Section 114AA as the show cause notice did not include a charge under this section, deeming its imposition as legally unsustainable.

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Issues Involved:
1. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
2. Imposition of penalty under Section 114AA of the Customs Act, 1962.

Summary:

Issue 1: Imposition of penalty under Section 112(a) of the Customs Act, 1962
The Appellant, a partner of the Customs Broker firm Babhravi Exim Services, was involved in the import of Chinese Batteries declared as Calcium Carbonate. The Directorate of Revenue Intelligence (DRI) observed the mis-declaration during surveillance at Haldia Port. The Appellant claimed to have acted in good faith, being approached by Raj Kumar Kothari and Vinod Lachwani for the import. However, investigations revealed that Mohammed Asgar, the purported proprietor, was merely a car driver, and the actual importers were Kothari and Lachwani. The Appellant admitted to repeated discussions about the import with Kothari and Lachwani and to having signed blank documents for cargo movement. The Tribunal found that the Appellant, aware of the true nature of the consignment, consciously facilitated the mis-declaration, rendering himself liable to penal action under Section 112(a).

Issue 2: Imposition of penalty under Section 114AA of the Customs Act, 1962
The Tribunal observed that the show cause notice issued to the Appellant did not include a charge under Section 114AA. Consequently, the Appellant could not be subjected to a penalty under this section. The Tribunal concluded that the imposition of penalty under Section 114AA was bad in law and could not be sustained.

Conclusion:
The Tribunal upheld the penalty imposed under Section 112(a) but discharged the Appellant from the penalty under Section 114AA, as no notice for the latter was issued. The appeal was disposed of with the modification that the penalty under Section 114AA was not enforceable.

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