2019 (6) TMI 1440 - HC - Customs

Imposition of penalty u/s 114 of CA - principal allegation against the appellant was that as clearing house agent, he neither had any contact with the exporter nor had even verified his or their identity - HELD THAT - For imposing a penalty of even ₹ 15 lakhs by reducing the same from ₹ 30 lakhs, the exact complicity of the appellant with the illegal exportation should have been established and found by the tribunal and a finding recorded by it to that effect. The only finding is at paragraph 5 of the impugned order, which is insufficient. The matter is remanded to the tribunal by setting aside the said order for re-adjudication in accordance with law - Appeal allowed by way of remand.

Summary

Issues:
Imposition of penalty under Section 114 of the Customs Act, 1962 - Reduction of penalty by tribunal - Allegations against clearing house agent - Insufficiency of findings by tribunal - Remand for re-adjudication.

Analysis:
The High Court of Calcutta admitted an appeal concerning the imposition of a penalty under Section 114 of the Customs Act, 1962, on the substantial question of law regarding the validity of the penalty imposed by the tribunal. The penalty of ?30 lakhs imposed by the adjudicating authority was reduced to ?15 lakhs by the tribunal. However, the appellant remained aggrieved by the tribunal's order dated 9th May, 2018. The appellant, a clearing house agent, was involved in processing a consignment of goods in Kolkata for exportation from Nepal to other countries, where the goods were mis-declared as sandalwood by the exporter. The appellant was accused of complicity in the illegal exportation due to lack of verification of the exporter's identity, who was deemed fictitious and untraceable.

The Court highlighted the requirement for establishing the exact complicity of the appellant with the illegal exportation to justify the imposition of a penalty, emphasizing the insufficiency of findings by the tribunal in this regard. The Court noted that the tribunal's order was not perverse but lacked a comprehensive determination of the appellant's involvement in the illegal exportation. Consequently, the Court remanded the matter back to the tribunal for re-adjudication within two months from the date of the order, directing a thorough reconsideration in accordance with the law after hearing the parties and issuing a reasoned order. The appeal was disposed of with this remand order for further proceedings.