2015 (11) TMI 944 - AT - Customs

Confiscation of goods - Penalty u/s 114 - CHA did not take care to verify the genuineness of export/exporters and therefore they have aided in smuggling of red sanders - Held that - It is already concluded in favour of the appellants that they have not indulged themselves malafidely in filing of the shipping bill in question, leading to attempted export of prohibited goods. The Act of negligence and lack of vigilance on the part of the appellants have already been taken care of under the provisions of CHALR and the security deposit stands forfeited by the order of the Commissioner of Customs (General) as noted above. I further find that there is no finding to the effect that the appellant have indulged into any Act leading to an order of confiscation under the provisions of section 113. Further I find that order of confiscation is the condition precedent for imposition of penalty under Section 114(i). - condition precedent for imposition of penalty under Section 114(i) is absent in the facts of the present case - Decided in favour of appellant.

Summary

Issues:
- Appeal against order passed by Commissioner of Customs appeals
- Imposition of penalty under Section 114(i) of the Act
- Allegations of negligence and abetment by CHA firm
- Consideration of malafide intent and conditions for penalty imposition

Analysis:
1. Appeal against Commissioner's Order:
The appellants challenged the order passed by the Commissioner of Customs appeals, MumbaiII, dated 22/11/2012, where their appeal was partially allowed. The appellants, a CHA firm, and one of the partners were involved in the appeal due to penalties imposed under Section 114(i) of the Act.

2. Imposition of Penalty under Section 114(i):
The penalty was imposed on the appellants by the adjudicating authority for their involvement in an attempted export of red sanders. The penalty was challenged in the appeal before the Commissioner (Appeals) and subsequently before the Tribunal. The Tribunal considered the conditions for penalty imposition under Section 114(i) and Section 114 AA of the Act.

3. Allegations of Negligence and Abetment:
The appellants were accused of negligence and lack of vigilance in their duties as a CHA firm, which allegedly facilitated the attempted export of prohibited goods. The argument presented was that the appellants did not act with malafide intent, and their negligence was not sufficient to warrant the penalty imposed under Section 114(i).

4. Consideration of Malafide Intent and Penalty Conditions:
The Tribunal analyzed the findings of the Commissioner of Customs (General) and the conditions precedent for imposing penalties under Section 114(i) and Section 114 AA. It was concluded that there was no malafide intent on the part of the appellants, and the conditions necessary for penalty imposition were not met in the present case. Therefore, the penalties imposed were set aside, and the appellants were entitled to consequential relief as per the law.

In conclusion, the Tribunal allowed the appeal of the appellants, overturning the penalties imposed under Section 114(i) and Section 114 AA, based on the absence of malafide intent and the failure to meet the conditions for penalty imposition as per the provisions of the Act.