https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=769691 https://www.taxtmi.com/caselaws?id=769691 Levy of penalty under Section 117 of the Customs Act, 1962 on the Customs House Agent (CHA) and Rajiv Sahni, who was working merely as Business Development Associate of M/s. Essar Oil Limited - alleged violations related to clearance of goods under a Project Authority Certificate (PAC) - no direct contravention by the CHA is established. Penalty on Customs broker - HELD THAT:- After going through the provision of Section 46 of the Customs Act, it is clear that under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer. From the perusal of the provision of Section 117, it is clear that where there is no express penalty elsewhere in the Act then penalty may be imposed under Section 117 for contravention of any provisions of this Act. In the impugned order, the Adjudicating Authority has not made it clear that the appellant Mahendra N. Thacker violated which provisions of Customs Act which he was duty bound to follow. Therefore, penalty cannot be imposed upon the appellant arbitrarily without clearly defining the violation of any specific provision of the Customs Act. As far as the violation of Customs House Agents Licensing Regulations, 2004 is concerned, no penalty can be imposed upon the Customs Broker or CHA and only his licence may be suspended or may be cancelled under Regulation 20 - the learned Adjudicating Authority has imposed penalty upon the appellant M/s. Mahendra N Thacker arbitrarily without proper justification and the order imposing penalty upon the appellant Mahendra N Thacker is liable to be set aside. Penalty on Shri Rajiv Sahni - HELD THAT:- There is sufficient evidence on the record which prove beyond doubt that Shri Rajiv Sahni, Business Development Associate (BDA) was on the lookout for potential bulk buyers of the HSD imported by M/s. Essar Oil Limited. He was well aware that projects funded by World Bank are eligible to obtain Customs Duty free HSD for use in the project. Contractors doing the project work aided by the World Bank approached him for help and procurement of duty free HSD as they were in possession of Project Authority Certificate. Shri Rajiv Sahni helped them to register themselves with M/s. Essar Oil Limited to procure imported Customs Duty free HSD and to complete all the necessary formalities - from the material available on the record, it is clear that Shri Rajiv Sahni played a key role in the diversion of the imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted in the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-. Therefore, the order of the Principal Commissioner imposing penalty of Rs. 2,00,000/- on Shri Rajiv Sahni Business Development Associate of M/s. Essar Oil Limited is sustainable and is liable to be confirmed. Conclusion - i) Under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer. ii) Shri Rajiv Sahni played a key role in the diversion of imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-. Appeal dismissed. Case-Laws Customs Mon, 28 Apr 2025 00:00:00 +0530