TaxTMI 
TaxTMI 
2023 (7) TMI 642
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....ager & Authorized Person of appellant, in his statement, informed the officers that their Inspector Mr. Bob Rushton, a citizen and resident of UK had examined the cargo in UK and the Certificates were issued by their Houston (USA) office during investigation it was recorded that it was human error of Mr. Bob Rushton which led to the offending import. Penalty was proposed against the appellant under Section 112 (without specifying sub- clause) and 114AA of Customs Act, 1962. Same was dropped by lower authorities for Section 114AA, but upheld for Section 112 to the extent of Rs. 10 Lakhs by Commissioner (Appeals) after reduction from Rs. 15 Lakhs. Vide its written submissions dated 05.07.2023 advocate for the appellant submitted that the Hon'ble Tribunal has held in the case of P. P. Dutta Wing CDR (Retd.) v/s Commissioner of Customs, New Delhi, 2013 (293) ELT 127 (Tri-Del.) that show cause notice issued without mention of clause or sub-clauses of Section 112 of Customs Act, 1962 cannot be sustained. 3. Ld. Adjudicating Authority held that appellant was liable to penalty under Section 112 (a) as well as 112 (b). It dropped the proposal invoking Section 114AA by observing that ....
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.... (172) ELT 229 (Tri.-Mumbai) 4.3 In the case of Express Kargo Forwarders Pvt. Ltd. v/s Commr. of Cus., Bangalore, 2002 (143) ELT 128 (Tri.-Bang.), Hon'ble Tribunal set aside penalty imposed on the main persons in-charge of the Company sitting in HQ under Section 112 (a) on the ground of negligence for want of preconcert or knowledge on their part. In the case of Unison Clearing Pvt. Ltd., 2014 (308) ELT 160 (Tri,-Del.) Hon'ble Tribunal has set aside penalty imposed on appellant under Section 112 (a), where employees were involved. Decision of Hon'ble Tribunal in the case of Neptune's Cargo Movers Pvt. Ltd., 2007 (219) ELT 673 (Tri.-Chennai) was also cited to be of the same effect. 5. On the above basis, it was submitted that penalty imposed on appellant under Section 112 of Customs Act, 1962 is not tenable and hence, the same may be quashed and set aside. 6. Department on the other hand, justified the penalty pointing out that he appellant is a specified pre-shipment inspection agency under the Handbook of Procedures (HBP) of Foreign Trade Policy, 2009-14 (FTP), engaged in inspection of metal waste & scrap imported into India in accordance with the procedur....
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....ri Bob, inspector, who had carried out visual inspection after completion of 25%, 50% and 100% loading of the containers and had also checked the radiation level; that on enquiry with Shri Bob, he informed that owing to loading the scrap through grabs, shells having rusty and dusty look may have escaped his notice. On this basis, it was clarified that it was a human error and may be condoned. On 4.4.2012, one show cause notice bearing No. VIII/10- 56/JC/0&A/2011 was issued proposing confiscation of the seized goods under section 111 (d). 1), (m) and (o) of the Customs Act, 1962 and imposition of penalty under section 112 ibid on the importer & shipping agent and penalty under section 112 & 114AA on the appellant. The appellant participated in the adjudication proceedings by way of filing a detailed reply and by attending personal hearing through authorized representative and urged upon the Ld. Adjudicating Authority to drop the proceedings initiated against the appellant. The Ld. Adjudicating Authority considered the submissions advanced by the appellant insofar as imposition of penalty under section 112 and imposed penalty of Rs. 15,00,000/- against the appellant under section 112....
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....ping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111........." In order that a person is penalised under the above provision, it has to be established that he acquired possession of or was in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any ether manner dealing with any goods which, he knew or had reason to believe, were liable to confiscation under Section 111 of the Act. Ld. DR has harped on the expression underlined above and submitted that the appellant had dealt with the goods by associating himself with the modus operandi of clearance of the goods. Ld. Counsel has opposed this argument. We find that no physical act of the appellant in relation to the goods in question has been brought out to justify the penalty. The expression in any other manner dealing with has to be understood ejusdem generis with the preceding words/expressions in the clause in terms of the Apex Court's ruling in Thakur Amar Singhji v. State of Rajasthan (AIR 1955 SC 504]. The Court held thus :- "the true ....
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.... foreign country which will not come within the mischief of the provisions of the Customs Act, 1962. I have given my anxious consideration to the plea of the learned D.R. for remitting the matter, Inasmuch as inherent want of jurisdiction and also non-applicability of the provisions of the Customs Act, 1962 go to the root of the matter, no purpose will be served by remanding this issue, as the legal position is well-settled and does not admit of any doubt or controversy. In this context I may usefully refer to Sections 3 and 4 of the Indian Penal Code where express provisions have been incorporated extending the applicability of the provisions of the IPC to any citizen of India beyond India and also the power of Indian Courts to try them for offence committed beyond India in the same manner as if such acts have been committed within India. I should like to note that similar provisions under the Customs Act. 1962 are conspicuous by their absence. Therefore, on this legal question I hold that penalty on appellant C.K. Kunhammed is not sustainable under law and the same is accordingly set aside and his appeal allowed." It was further submitted that the lower authorities have failed....
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....by the department against the appellant attributed any knowledge on the part of the appellant who is the employer and approved Inspection Agency by DGFT authorities. . Shri Bob Inspector who failed to check and detect the rusty bomb shells due to his stated human error. As the material relied upon by AR indicates, the agency is subjected to discipline by D.G.F.T authorities. This Court is only concerned with penal proceeding under Section 112(a). Shri. Bob Inspector was located in London which was at the relevant time not a territory, within the purview of penalty proceedings under Indian Customs Act, 1962, as being a person who commits any omission outside India. However, for the purposes of present proceeding this may not be a relevant consideration as the penal proceedings have been directed against the present appellant in its capacity as an employer for lack of diligence on the part of its employee and itself. The concept of vicarious liability in penal proceedings, is not completely unknown in the Customs Act proceedings, as number of such cases between CHA and its employees have been dealt with under purview of Section 117, which is in the nature of residuary penal provision....