Appellate authority overturns penalties on CHA firm; no evidence of abetment in export of prohibited goods found.

The appellate authority set aside the penalties imposed on the CHA firm under Customs Act sections 114(i) and 114(iii). The judgment concluded that the allegations of abetment in exporting prohibited goods were unsustainable due to the absence of evidence indicating the appellant's knowledge of the concealed red sandalwoods. The appeal was allowed, emphasizing that mere violations of CHALR 2004 without knowledge do not constitute abetment.

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Issues:
Alleged violation of CHALR 2004 leading to penalty under Customs Act sections 114(i) and 114(iii) without evidence of abetment.

Analysis:

The appeal was filed by a CHA firm, M/s. Viksun Carriers Private Ltd., regarding a Show Cause Notice issued for alleged involvement in the export of red sandalwoods concealed in a consignment of canola seeds. The appellant was accused of failing to obtain and verify the KYC of the exporter and not advising the client to comply with Customs Act provisions and CHALR 2004. The Original Adjudicating Authorities imposed penalties under Customs Act sections 114(i) and 114(iii), which were upheld by the first appellate authority, leading to this appeal.

The appellant argued that the allegations were related to CHALR 2004 violations, and no proceedings under CHALR had been initiated against them. They claimed no knowledge of the content of the consignment beyond the exporter's declaration and no evidence or admission of knowledge about the red sanders. The appellant contended that abetment charges based solely on CHALR violations without knowledge could not be sustained.

The impugned order highlighted the failure of the appellant to obtain and verify the exporter's KYC, leading to allegations of abetment in the attempted export of prohibited goods. However, the Order-in-Original and impugned order primarily focused on CHALR 2004 violations as the basis for the abetment allegations under Customs Act sections 114 and 114(iii).

The judgment analyzed the definition of abetment as aiding or encouraging illegal acts, emphasizing that knowledge is essential for abetment. In this case, no evidence or admission indicated the appellant's knowledge of the red sanders. Without proof of knowledge, the allegations of abetment based solely on CHALR violations were deemed unsustainable, leading to the setting aside of penalties under Customs Act sections 114(i) and 114(iii), and allowing the appeal.

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