2015 (12) TMI 793 - AT - Customs

Penalty u/s 112(a) - misdeclaration of goods - hazardous waste oil - Held that - There is no evidence brought out by the department in their process of investigation to establish that the appellant had prior knowledge that Raja Singh was speaking fake or that anything regarding the misdeclaration of goods. Further the importer had imported consignments of same descriptions in the past through the port of ICD Tughlakabad wherein no discrepancy was noted. The appellant therefore cannot be found fault for not entertaining any doubt regarding the documents provided by Shri Raja Singh. The goods were found to be prohibited hazardous waste oil only after test by a laboratory. I find that the respondents have not been able to adduce any cogent evidence to establish the conscious involvement of appellant in the incident. The penalty imposed upon the appellant is unsustainable. - impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Challenge to imposition of penalty under Section 112 (a) of the Customs Act, 1962 based on misdeclaration of goods.

Analysis:
The appeal was filed to contest the penalty of Rs. 1,00,000 imposed on the appellant under Section 112 (a) of the Customs Act, 1962. The appellant, an authorized Customs House Agent (CHA), filed Bills of Entry declaring goods as "Bitumen" on behalf of M/s. Star Enterprises. However, upon examination, the goods were identified as hazardous waste oil containing arsenic. The appellant's statement revealed that the documents were provided by Shri Raja Singh, who falsely claimed to be the Manager of M/s. Star Enterprises. Subsequently, Shri Raja Singh admitted to providing false information and clarified his lack of association with M/s. Star Enterprises. Despite the misdeclaration, the appellant argued that they acted in good faith based on the information provided by Shri Raja Singh.

The records indicated that Shri Raja Singh intentionally misled the appellant by falsely claiming to be the Manager of M/s. Star Enterprises. The department failed to produce evidence proving the appellant's prior knowledge of the misdeclaration or any conscious involvement in the incident. It was noted that the importer had previously imported similar goods without issue. The goods were identified as hazardous waste oil only after laboratory testing, and the department could not establish the appellant's direct involvement in the misdeclaration. Consequently, the Tribunal found the penalty imposed on the appellant to be unjustified and unsustainable.

In conclusion, the impugned order upholding the penalty was set aside, and the appeal was allowed in favor of the appellant. The judgment was pronounced on 01/10/2015 by Smt. Sulekha Beevi C.S., Member (Judicial) at the Appellate Tribunal CESTAT NEW DELHI.