2017 (6) TMI 1239 - AT - Customs

Penalty on CHA u/s 112(a) of the Customs Act, 1962 - High Seas Sale - Concessional rate of Duty - N/N. 36/96 - actual user condition - it was found that M/s. JVL used the name of M/s. Magpic Overseas Co., a fictitious firm to avail the concessional rate of duty - The main contention of the appellant is that they have no knowledge of the alleged offence - Held that - It is noted that the appellant CHA was aware of the High Seas Sale to M/s. Magpie, but, the entire transaction was made by M/s. JVL. Even the payment was received from M/s. JVL. The appellant had not refuted such charge. Hence, the plea of good faith cannot be accepted. A person cannot claim the plea of good faith by mere saying, without any material, as he had taken due care and attention. In the present case, it is apparent on the face of the record that the appellant had helped M/s. JVL for committing the offense. Hence, the imposition of penalty is justified. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Alleged fraudulent clearance of goods at a concessional rate of duty using a fictitious firm.
2. Imposition of penalty on the Customs House Agent (CHA) under Section 112(a) of the Customs Act, 1962.

Analysis:
1. The case involved the fraudulent clearance of goods at a concessional rate of duty by M/s. Jhunjhunwala Vanaspati Ltd. using a fictitious firm, M/s. Magpie Overseas Co. The appellant, a Customs House Agent, prepared the Bills of Entry for the imported goods. The appellant claimed no knowledge of the offense and argued good faith. However, it was established that M/s. JVL defrauded the government revenue by using the fictitious firm for clearance. The appellant's awareness of the High Seas Sale to M/s. Magpie was noted, with the entire transaction being conducted by M/s. JVL, including receipt of payment. The appellant did not refute these charges, leading to the rejection of the good faith plea. The judgment emphasized that good faith requires tangible evidence of due care and attention, which was lacking in this case. The Tribunal concluded that the appellant had assisted M/s. JVL in committing the offense, justifying the imposition of the penalty.

2. The Commissioner of Central Excise imposed a penalty of &8377; 2,00,000/- on the appellant under Section 112(a) of the Customs Act, 1962. The appellant's argument of lack of knowledge and acting in good faith was dismissed based on the evidence that the appellant was aware of the transactions involving the fictitious firm. The Tribunal upheld the penalty, stating that the appellant's involvement in aiding M/s. JVL in the fraudulent clearance justified the decision. The Tribunal found no grounds to interfere with the impugned order and subsequently dismissed the appeal filed by the appellant.

This detailed analysis of the judgment highlights the fraudulent activities, the role of the appellant, and the justification for imposing the penalty under the Customs Act, 1962.