TaxTMI 
TaxTMI 
2026 (8) TMI 1628
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....cific intelligence, the Directorate of Revenue Intelligence, Chennai Zonal Unit (DRI) intercepted the consignment, which had been declared as containing gas stoves and spare parts. Upon examination, the DRI found 2,01,13,000 pieces of sewing machine needles of the brands "Organ" and "Flying Tiger" and 70,200 pieces of steel measuring tapes concealed behind the declared goods. The said goods had not been declared in the Bill of Entry, invoice, packing list or other documents submitted for clearance. 3. The investigation revealed that the declared importer, M/s.R.M. Enterprises, was owned by one Ramesh Menon and that the address furnished for the importer was fictitious. The investigation also revealed that the persons allegedly connected with the transaction, including one Vishal, could not be traced. 4. The petitioner is the proprietor of M/s.The Sea Shipping Forwarders. The case of the Department is that the petitioner received the import documents from one Vishal, handed them over to M/s.Asian Shipping Agencies, the Customs Broker, and instructed the Customs Broker to file the Bill of Entry in the name of M/s.R.M. Enterprises. It is further alleged that the petitioner made ....
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....e petitioner, submitted that the petitioner is neither the owner nor the beneficial owner of the imported goods and, therefore, cannot be made liable for the differential duty under Section 28 of the Act. She further submitted that the earlier order of this Court had specifically held that the petitioner could not be treated as the beneficial owner merely because the actual importer could not be traced. 11. Learned counsel further submitted that the respondent has failed to record a specific finding, supported by independent material, that the petitioner had knowledge of the undeclared goods or had knowingly participated in the attempted smuggling. It was also submitted that the respondent relied upon an alleged previous incident involving the petitioner, but the penalty imposed in that case has subsequently been set aside by the CESTAT, Chennai, by order dated 02.06.2026 in Customs Appeal Nos.40678 of 2018 and 42293 of 2018. 12. Per contra, Mr. K. Mohana Murali, learned Standing Counsel appearing for the respondent, submitted that the materials collected during investigation clearly establish the petitioner's involvement in the transaction. According to him, the petitioner r....
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.... or that he knowingly participated in the misdeclaration or attempted smuggling. 19. Section 147 of the Customs Act deals with the liability of the principal and agent. Under Section 147(3), a person expressly or impliedly authorised by the owner, importer or exporter to act as his agent may, subject to the statutory requirements, be deemed to be the owner, importer or exporter for the purposes of the Act. The provision cannot, however, be invoked merely on the basis of the fact that a person facilitated customs clearance. The necessary foundational facts establishing the agency contemplated by the provision must first be established. 20. The Supreme Court in Collector of Customs, Cochin v. Trivandrum Rubber Works Ltd., (1999) 106 E.L.T. 9 (S.C.), has held that the liability for duty under Section 28 is ordinarily that of the person chargeable with the duty and that the liability of an agent arises only in the circumstances specifically contemplated by Section 147(3). 21. In the present case, the respondent has not recorded a clear finding, supported by cogent material, that the petitioner was expressly or impliedly authorised by the actual owner or importer to act as his ....
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....g another person to commit an offence. It essentially involves actively aiding or facilitating the commission of an offence. Abetment necessarily involves at least two persons one who commits the offence and the other who abets its commission. Therefore, when the actual person who committed the offence is not found or his involvement in the improper importation is not established, a person cannot be penalised merely on the allegation of abetment. 14. Though the statement of Suresh Kumar appears to be an afterthought and does not inspire confidence, that by itself cannot establish that he was responsible for abetting the improper importation. Therefore, there is no justification for imposing penalty under Section 112(a) of the Customs Act. 15. Section 114AA is not invokable in the case of imports, as the provision was introduced to deal with fraudulent exports where the export is only on paper and no actual physical export takes place. Therefore, Section 114AA cannot be invoked in the present circumstances. 16. Accordingly, the penalties imposed on the appellants are set aside and the appeals are allowed." 27. Thus, the very earlier proceedings relied u....