TaxTMI 
TaxTMI 
2026 (9) TMI 2015
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....g Corporation in Bangalore and after completing the examination, container was transported to Chennai and as per the evidence on record, the goods were stuffed with '80 GSM A4 sheet paper' and proper officer of the Customs sealed the container with One Time Seal (OTS) and Liner Seal. Thereafter alleging that the said container is containing 'Red Sanders', DRI detained the container vide Mahazar dated 11.01.2019 and investigation commenced by recording statements from various persons. Thereafter Show Cause Notice (SCN) was issued on 10.07.2019 to the Appellant and others and Adjudication authority as per the Order-in-Original dated 30.12.2020 held that the 'Red Sanders' recovered during the investigation are liable for absolute confiscation and also confiscated the container, imposed penalty on various persons. As regards penalty on the Appellant, Adjudication authority dropped the proposal for penalty on the Appellant. Aggrieved by said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per the impugned order dated 16.11.2021 imposed equal amount of penalty of Rs. 1 crore on the Appellant as imposed on the exporter M/s....
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....f goods were replaced with 'Red Sanders'. A Customs Broker completely loses his access to the goods as and when it is sealed by the Customs officers with One time Seal. Further in the instant case there is no allegation in the Show Cause Notice that (i) the appellant herein had prior knowledge about the alleged plan of smuggling, (ii) the appellant participated in replacing the goods en-route to AKPPL, Chennai, (iii) that the Appellant colluded with the perpetrators of smuggling, (iv) that the Appellant had mens rea in exporting contra band goods, (v) the Appellant made monetary gain out of the said smuggling activity etc. Allegations against the Appellant in the Show Cause Notice was mainly with respect to the violation of Regulation 10 (n) and 10 (q) of CBLR, 2013, for which no penalty under Section 114 or 114AA of the Customs Act, 1962 can be imposed and therefore, the order passed by the Commissioner of Customs (Appeals) deserves to be set aside and the Appeal preferred by the Department numbered as C/20265/2022 with a prayer to impose penalty under Section 114AA of the Customs Act, 1962 on the Appellant also deserves to be set aside by this Hon'ble Tribunal especia....
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....his Act, whichever is the greater." 14. Thus, a person has to do or omit to do any act in relation to any goods; or has to abet the doing or omission of such an act in relation to any goods and such act or omission should render such goods liable to confiscation under Section 113. The words "such goods" clearly refer to "any goods" at the commencement of the section. The penalty imposed on the appellant is under Section 114(i), i.e. in case of goods in respect of which any prohibition is in force. Thus, when the offending goods here is Red Sanders Logs, it is the act or omission of the appellant in relation to Red Sanders Logs or abetment of such act or omission in relation to Red Sanders Logs, which act or omission would render such Red Sanders Logs liable to confiscation under Section 113, that would make the appellant liable to penalty under Section 114 (i)." 6. The Learned Counsel relied on the decision in the matter of M/s. Sourendra Nath Mallick Vs. Commissioner of Customs (Port), Kolkata and held that:- "8. We note that in the aforesaid findings of the learned Commissioner there is nothing to impute by way of a categorical assertion the conspiring of, or....
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....on 114AA, it is felt that penalty under Section 114 AA is not to be imposed is erroneous and not in consonance with the provisions of law. 8. Learned AR further submits that the penalty under Section 114AA has to be imposed where a person knowingly or intentionally makes, signs, or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of the Customs Act. 1962. In the present case it is on record that, M/s. Transorion Logistics Services Pvt. Ltd., Customs Broker, have attended to Customs clearance work without authorization of M/s. Om Shiva Exports on behalf of Shri. Shanmargam, Vinu Subramanian and B. S. Venkatesh and had undertaken clearance for 2(two) shipments in the past and for the present shipment for clandestine export of 'Red Sanders' in the guise of 'A4 Paper' thereby committed omission of not checking the antecedents /authorisation and also abetted the export of prohibited goods attracting penalty under section 114 of Customs Act, 1962. Further, they have not verified the authenticity of the IEC holder contravening the....
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....is given to such a CB, it will be a mockery of the entire system of controls by Customs. Any prohibited goods including drugs, arms, annuation etc., can be smuggled in and smuggled out very easily if the Customs Broker starts filing benami shipping bills without even the knowledge of the importer or exporter. It will be far worse, as in this case, if the CB lets out its credentials to another for a monthly fee and that person, in turn, files benami shipping bills or Bills of Entry to smuggle prohibited goods. 15. In view of above, we find that the impugned order needs to be sustained. The impugned order is upheld and the appeal is dismissed." 10. Learned AR also draws our attention to the decision of Tribunal in the matter of M/s Sagar Shipping Services Vs. CC(preventive) Jodhpur - 2025 (5) TMI 2018 - CESTAT NEW DELHI. 11. Heard both sides and perused the records. 12. We find that the allegation against the appellant is only on the grounds that they have not verified the authenticity of the IEC holder contravening the Regulations 11(a), 11(d) and 11(n) of Customs Brokers Licensing Regulations, 2013 read with Section 50 of the Customs Act, 1962 and Shipping Bill [E....