2018 (1) TMI 1526 - AT - Customs

Imposition of penalty on CHA u/s 112(a) and 114AA of CA - Misdeclaration of weight - HELD THAT - What the documents were supplied by M/s. JMD India, the appellant has filed Bill of Entry on the basis of the papers where the number of boxes were matching. There was no discrepancy found in the number of boxes at the time of landing of the goods. The CHA was not aware about the weight of the goods. Only later stage, it was found that the goods are having different weight. The importer has not disclosed the weight of the goods to the CHA. When it is so, then CHA cannot be penalised. Penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order of Commissioner of Customs (Appeals) regarding enhanced value and differential duty on imported goods, penalty under Sections 112(a) and 114AA on CHA firm.

Analysis:
The case involved appeals against an order passed by the Commissioner of Customs (Appeals) concerning the import of Screw and hardware items from China by M/s. JMD India in April 2012. The Department discovered that the weight of the goods exceeded the declared amount, leading to an increase in value and a demand for differential duty from the importer. Additionally, penalties were imposed under Sections 112(a) and 114AA on the appellant, who was a Customs House Agent (CHA) firm. The appellant challenged these penalties by filing the present appeals.

During the hearing, the appellant's advocate and the Revenue's representative presented their arguments. Upon reviewing the case and the documents provided by M/s. JMD India, it was observed that the appellant had filed the Bill of Entry based on the papers supplied, which accurately matched the number of boxes during the landing of the goods. No discrepancies in the number of boxes were found at that time. It was revealed that the CHA was unaware of the actual weight of the goods, as the importer had not disclosed this information. The discrepancy in weight was only discovered later. Considering these circumstances, the Tribunal concluded that the CHA could not be penalized for the importer's failure to disclose the accurate weight of the goods. Consequently, the impugned order was set aside, and the penalties were canceled, leading to the allowance of both appeals.

In conclusion, the Tribunal's decision was based on the lack of knowledge on the CHA's part regarding the actual weight of the imported goods, as the importer had not provided this crucial information. This lack of disclosure by the importer absolved the CHA from any penalization, resulting in the cancellation of the penalties imposed under Sections 112(a) and 114AA. The judgment emphasized the importance of accurate information disclosure by importers to prevent unwarranted penalties on CHA firms.