2003 (11) TMI 174 - AT - Central Excise

Customs Act Penalties Overturned: Lack of Evidence Leads to Successful Appeal

The appeal challenged a prohibition order on baggage clearance issued to a proprietary firm under Regulation 22 of CHALR-1984. The firm was accused of ... Penalty Issues:1. Prohibition order on clearance of baggage by a proprietary firm.2. Allegations of aiding and abetting in wrongful clearance of goods.3. Seizure of goods and examination procedures.4. Statements and disclosures by involved parties.5. Liability of Customs House Agent (CHA) and dock clerk.6. Penalty imposition under Customs Act.7. Legality of prohibition order under CHALR-1984.Analysis:1. The appeal challenged a prohibition order on baggage clearance issued to a proprietary firm under Regulation 22 of CHALR-1984. The firm was accused of aiding in wrongful clearance of goods, leading to penalties under Customs Act, 1962.2. The Commissioner found the proprietor and an employee of the firm guilty of aiding a passenger in declaring less quantity of goods to evade duty. Penalties were imposed under Sections 112(a) and (b) of the Customs Act, 1962. The appellant in Appeal No. 726/2001 was the employee.3. The seizure of goods from tempos revealed discrepancies in declarations and examination procedures. Statements from involved parties indicated discrepancies in declarations and handling of goods, leading to suspicions of under-declaration and evasion of duties.4. Statements from the proprietor and dock clerk revealed the process of handling the baggage and the discrepancies in declarations made by the passenger. Efforts to trace the passenger and another individual proved futile, raising questions about the authenticity of the declarations.5. The liability of the CHA and dock clerk was questioned, but based on previous judgments, it was established that their role ceased once goods were cleared and handed over to the passenger. The penalties imposed on them were not upheld due to lack of evidence of malfeasance.6. The penalty imposition under Section 112(a) of the Customs Act was found unsustainable based on the factual similarities with a previous case. The penalties on the appellants were set aside, and the appeals were allowed.7. The legality of the prohibition order under Rule 23 of CHALR-1984 was questioned, and since no malfeasance was established in the handling of baggage clearance, the order was set aside, and the appeal was allowed. The findings led to the allowance of all three appeals based on the lack of evidence supporting the penalties and prohibition order.