TaxTMI 
TaxTMI 
2026 (6) TMI 16
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....gle huge quantity of Red Sanders wood in 2 containers. The Customs Authority on intercepting the export consignments, found 12 pallets of "Polished Indian Brown Granite" were arranged in such a way to form a centre cavity which contained red sanders wooden logs which were hidden behind this Indian brown granite slabs which happened to be declared. These consignments were being exported by M/s. Raj Traders and M/s. Jayam Impex and they employed Shri Rajappa.V the Manager of the the Customs Broker M/s. Morkis Shipping and Trading Private Limited who had failed to exercise due diligence in verifying the antecedents of the exporter. Accordingly, based on the investigations, the Red Sander Logs were confiscated along with granite slabs whic....
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....missioner (Appeals) observed as follows: "the adjudicating authority has not implicated the appellant with the nefarious activity...." and that ".....the appellant has not been involved in the said nefarious activity..." and it is also stated that separate action under the Customs Broker Licencing Regulations had been initiated against the Customs Broker for the failure of the employee in failing to do proper background check of the exporter. However, since the appellant was not party to the attempted exports of prohibited goods, penalty under section 114A cannot be sustained. Reliance is placed on Final Order No.20084/2014 dated 23/1/2014-CESTAT, Bangalore and Final Order No.22297-22298/2017 dated 26/9/2017. 4. The Learned Authorised Re....
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....ing with a person who is not the exporter. In such a situation they should have verified whether such company is in existence and the person who has been dealing with him is an authorized by the firm or from actual Exporter. As such Shri. V. Rajappa by his omissions and commissions has allowed the unscrupulous person to act incognito in carrying out the nefarious activity of attempt of smuggling of Red Sanders. He should have got doubt when one person is representing two companies. Hence, I find that he has not exercised due diligence. As an employee of Customs Broker Company he has the responsibility of adhering with the rules and Regulations. He has failed in his responsibilities and helped the unscrupulous people in perpetrating the offe....
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....cause the appellant did not exercise his diligence and did not fulfil the KYC norms for the exporter as laid out under the Customs Broker Licensing Regulations, 2013. If a car is rented to a juvenile by a car agency (zoom car) without verifying the KYC of the juvenile and the juvenile is involved in an accident resulting in death, the culpability of the car agency cannot be absolved of any wrong doing. Hence, I find that the imposition of penalty of Rs. 10,00,000/- under Section 114 of Customs Acts 1962 on the appellant is warranted and tenable. The case laws cited by the appellant in his defence do not come to his rescue." 7. In view of the above observations of the Revenue authorities, we find that there is nothing on record that appel....