2013 (3) TMI 553 - AT - Customs

Question of penalty imposed on a CHA against whom here is a contemplation of proceedings under CHALR. - Appeal is filed against the penalty imposed u/s 112A of Customs Act, 1962. It has been found that the CHA did not wait for the assessment and out of charge but advised the shipping agent to sail. Held that The question arises here whether CHA can be punished for sending the communication before assessment of bill of entry. After considering the mail sent by CHA tribunal finds that it can not be said that CHA rendered the vessel liable to confiscation since CHA never informed the shipping agent that clearance formalities were completed and as we have observed earlier, according to Assistant Commissioner s report vessel had left much before receipt of e-mail from CHA. If CHA can not be said to have rendered the vessel liable to confiscation, he is not liable to penalty under Section 112 of Customs Act, 1962. - The penalty imposed on the appellant cannot be justified and therefore the impugned order is set aside and appeal is allowed.

Issues:
1. Out of turn hearing application for Appeal No. C/66/2012.
2. Penalty imposed on CHA under Section 112A of Customs Act, 1962.
3. Departure of vessel before assessment completion.
4. Discrepancy in departure time of vessel.
5. Reliability of reports from Assistant Commissioner and shipping agent.
6. Interpretation of e-mails exchanged between CHA and shipping agent.
7. Liability of CHA for rendering vessel liable to confiscation.
8. Justification of penalty imposed on the appellant.

Analysis:
1. The application for out of turn hearing of Appeal No. C/66/2012 was filed, seeking consideration due to the penalty imposed on the CHA under Section 112A of the Customs Act, 1962. The Tribunal, after hearing both sides, allowed the application as the matter involved a penalty against the CHA, with potential proceedings under CHALR, warranting expedited attention.

2. The penalty of Rs. 2.5 lacs was challenged by the appellant, who had filed a bill of entry for a vessel that left port before assessment completion. The case revolved around the CHA's alleged premature advice to the shipping agent, leading to the vessel's departure before formalities were finalized.

3. Discrepancies in the vessel's departure time were highlighted, with conflicting reports from the Assistant Commissioner and the shipping agent. The Tribunal noted the absence of a clear finding on the exact departure time before imposing the penalty, emphasizing the need for a comprehensive assessment before penalizing the CHA.

4. The reliability of reports from the Assistant Commissioner and the shipping agent was debated, with the appellant's counsel arguing in favor of relying on the former due to potential bias of the latter as a co-noticee. The Tribunal considered the sequence of events and the timing of communications to determine the CHA's liability accurately.

5. The interpretation of e-mails exchanged between the CHA and the shipping agent played a crucial role in assessing the CHA's responsibility for the vessel's premature departure. The Tribunal scrutinized the content of the e-mails to ascertain whether the CHA explicitly informed the shipping agent of completion of formalities, which would render the vessel liable to confiscation.

6. Ultimately, the Tribunal concluded that the CHA could not be held responsible for rendering the vessel liable to confiscation, as the communications did not conclusively establish that formalities were completed before the vessel's departure. Consequently, the penalty imposed on the appellant was deemed unjustified, leading to the setting aside of the impugned order and allowing the appeal.

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