2015 (11) TMI 1087 - AT - Customs

Violation of the provisions of the Customs House Agents Licensing Regulation, 2004 - lapse on the part of Mr. G.S. Prince who was a G card-holder of the appellant - Misdeclaration of goods - Import of second hand cars - Held that - Mr. G.S. Prince admitted in his statement that he acted in his personal capacity and the appellant. CHA was not aware his activities in this regard. It is also seen that the appellant s statement was never recorded and there is no evidence to suggest that the appellant was aware of the activities of Mr. G.S. Prince. In this regard, we find that in respect of Appeal the CESTAT allowed the appellant s appeal 2015 (11) TMI 758 - CESTAT NEW DELHI and set aside the penalties imposed upon it on similar grounds and on the basis of similar evidence. CESTAT in that order came to a finding that there was no evidence to prove the involvement of the appellant, that its employee had suo motu acted for his personal greed and beyond the scope of duty and therefore the employer (i.e. the appellant) cannot be penalised. - where the agent was authorised expressely or impliedly by the owner, the owner shall also be liable for the actions of agent. In the present case, no evidence has come on record that the appellant authorised Mr. G.S. Prince expressly or impliedly. - Levy of penalties set aside - Decided in favour of appellants.

Summary

Issues:
Appeal against penalty imposed on CHA for facilitating illegal imports by an employee acting beyond the scope of duty.

Analysis:
The case involved appeals against Orders-in-Original imposing a penalty of Rs. 2 lakhs on the appellant CHA for facilitating illegal imports of second-hand luxury cars mis-declared as new. The appellant was penalized based on the actions of its employee, Mr. G.S. Prince, who was a G card holder. The appellant argued that Mr. Prince acted independently for personal gain without its knowledge, similar to a previous case where penalties were set aside due to lack of evidence implicating the appellant.

The Departmental Representative contended that the appellant couldn't evade responsibility for Mr. Prince's actions as he was an employee and G card holder. Referring to legal precedents, the Departmental Representative argued that penalties on CHAs could be imposed even if the employee acted independently. However, the Tribunal noted that Mr. Prince admitted to acting on his own without the appellant's knowledge, and there was no evidence implicating the appellant in his actions.

The Tribunal referenced a previous order where penalties on the appellant were set aside due to lack of evidence proving the appellant's involvement in the employee's actions beyond the scope of duty. The Tribunal highlighted that in subsequent proceedings, penalties were not imposed on the appellant, further supporting the decision to set aside the penalties in this case. The Tribunal distinguished the judgments cited by the Departmental Representative, emphasizing the need for evidence of the appellant authorizing the employee's actions for liability to attach.

Based on the lack of evidence implicating the appellant and following the precedent set in the appellant's previous case, the Tribunal set aside the penalties imposed on the appellant and allowed the appeals. The Tribunal's decision was grounded in the principle that the employer, i.e., the CHA, cannot be penalized for actions of an employee acting beyond the scope of duty without the employer's knowledge.