2015 (3) TMI 1064 - AT - Customs

Penalty u/s 117 - Suspension of CHA License - Violation of CHALR - Held that - Commissioner (Appeals) has already reduced the penalty in the case of the appellant Shri P.L. Subramanian from ₹ 50,000/- to ₹ 25,000/-. Taking into consideration of the fact that in the case of valuation of export goods, role of CHA is not involved under the provisions of CHALR. As confirmed by the Ld. Advocate, the department has already taken action and suspended the license of the CHA. Further, this is the case where Section 114 of the Customs Act has not being invoked against the appellants for imposition of penalty for fraudulent exports or any provision under Section 113 of the Customs Act. Section 117 of the Customs Act is the penalty prescribed where no penalty has been expressly provided in any of the sections. Both in the show cause notice and in order-in-original, the adjudicating authority has not invoked the Section 114 of the Customs Act but imposed penalty under Section 117 of the Act. Prima facie, the appellants have made out a case for waiver of pre-deposit of penalty. Accordingly, in both the appeals pre-deposit of penalty is waived and its recovery stayed till the disposal of the appeals - Stay granted.

Summary

Issues:
- Imposition of penalty under Section 117 of the Customs Act on CHA and clearing clerk.
- Role of CHA in valuation of export goods.
- Invocation of Section 114 and Section 117 of the Customs Act for penalty imposition.
- Reduction of penalty by the Commissioner (Appeals).

Analysis:
The judgment involves four appeals arising from two Order-in-Originals and a common Order-in-Appeal, concerning the imposition of penalties on a Clearing & Shipping Agency (CHA) and a clearing clerk. The applicants sought waiver of pre-deposit of penalties of Rs. 50,000 and Rs. 25,000, respectively. The CHA's advocate argued that the CHA acted in accordance with CHALR, processed export documents, and was not responsible for the valuation of goods. The Department alleged overvaluation of export goods, leading to penalties under Section 117 of the Customs Act. The advocate contended that the CHA's license had been suspended, and no penal proceedings under Section 114 were indicated in the show cause notice.

The Department maintained that the CHA did not act in good faith, justifying the imposed penalties under Section 117. The Member (T) analyzed the case and noted that the issue revolved around penalty imposition under Section 117. The Commissioner (Appeals) had already reduced the clearing clerk's penalty. It was clarified that the CHA's role did not involve valuation under CHALR, and the Department had suspended the CHA's license. Notably, Section 114 or Section 113 of the Customs Act was not invoked for penalty imposition; instead, Section 117 was applied as a residual penal provision. The adjudicating authority had not invoked Section 114 but imposed penalties under Section 117. Consequently, the Member (T) found merit in waiving the pre-deposit of penalties for both appellants, staying the recovery until the appeals' disposal. As a result, all four stay applications were allowed.

In conclusion, the judgment addressed the specific issues of penalty imposition under Section 117, the role of a CHA in export valuation, and the application of relevant sections of the Customs Act. The decision to waive pre-deposit and stay penalty recovery was based on the absence of specific penal provisions invoked against the appellants, leading to a favorable outcome for the applicants in the appeals.