2011 (10) TMI 576 - AT - Customs

Summary

Issues involved: Application to dispense with pre-deposit of penalty u/s 112 and 114A imposed on CHA for alleged involvement in smuggling and mis-declaration of goods.

Summary:
The judgment dealt with an application seeking to waive the pre-deposit of penalty imposed on a Customs House Agent (CHA) under sections 112 and 114A. The Commissioner imposed a penalty of Rs. 2 lakhs on the CHA for allegedly collaborating in the smuggling of goods through mis-declaration and avoiding investigation proceedings. The Commissioner noted the CHA's negligence in questioning the undervaluation of goods and highlighted the lack of inquiry by the CHA regarding the valuation aspect of the imported goods. The Commissioner found the CHA's negligence supported the importers in attempting clearance under gross mis-declaration. However, the Tribunal observed that there was no positive evidence indicating the CHA's knowledge of the mis-declaration. The adjudicating authority's reasoning that the CHA should have inquired about the correctness of the value before filing the Bill of Entry was deemed unjustifiable. The Tribunal held that the CHA cannot be held liable without direct evidence reflecting active participation in the misdeclaration. Therefore, the Tribunal dispensed with the pre-deposit requirement of penalty and stayed the recovery during the appeal process.