Customs penalty on CHA fails where retracted statements and no independent proof of knowledge or false declaration exist.

Penalty under Sections 114(iii) and 114AA of the Customs Act could not be sustained against a Customs House Agent where the record showed only processing of shipping bills on documents supplied by exporters. The department failed to prove any active participation in attempted improper export or in making false declarations, and there was no material showing knowledge of overvaluation. A retracted statement, unsupported by independent corroboration, was insufficient, and the co-noticee's statement did not satisfy the required evidentiary safeguards. On these facts, the penalty was set aside.

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Issues: Whether the penalty imposed on the Customs House Agent under Sections 114(iii) and 114AA of the Customs Act, 1962 for alleged attempted improper export and use of false declarations could be sustained on the basis of the appellant's statement and the co-noticee's statement.

Analysis: The appellant, acting as authorised CHA, had prepared and filed the shipping bills on the basis of the KYC documents and export papers supplied by the exporters. The record did not establish the essential ingredients of an attempt to export improperly against him, since there was no material showing that he had done anything beyond processing the documents placed before him. As to the alleged overvaluation and receipt of 1% IGST or drawback, the statement relied upon by the department was retracted and was not supported by independent corroboration. The co-noticee's statement also did not satisfy the evidentiary safeguards governing use of such statements, and the department did not discharge the burden of proving the appellant's knowledge of overvaluation or his active participation in any false declaration.

Conclusion: The penalty could not be sustained and was liable to be set aside.

Final Conclusion: The appeal succeeded and the appellant was relieved of the penalty imposed under the impugned order.

Ratio Decidendi: Penalty for attempted improper export and false declaration cannot be upheld on the basis of an uncorroborated, retracted statement unless the department independently proves the requisite knowledge, participation, and statutory ingredients of the alleged contravention.

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