2016 (3) TMI 986 - AT - Customs

Imposition of penalty under Section 114 (i) & (iii) of Customs Act, 1962 - Violation of Facility Notice No. 41/2009 by the appellant and due to negligence of the appellant serious offence of the smuggling of red-sanders was committed - Held that - the details of the shipping bills were not reflecting in the online data. In this situation, it is very clear that when the shipping bills unauthorizedly filed were not appearing online, no obligation can be casted on the appellant as the appellant had no knowledge about the filing of the subject shipping bills. The penalty can only be imposed in a case when the appellant knowingly involved in any act which helped the smuggling of red sanders which is not the case here. In this fact of the case, the involvements of the appellant or non-compliance of Facility Notice No. 41/2009 is not established. Therefore, penalty can not be imposed on the appellant. - Decided in favour of appellant

Summary

Issues:
Imposition of penalty under Section 114 (i) & (iii) of Customs Act, 1962 for non-compliance with Facility Notice No. 41/2009 regarding tracking of shipping bills online.

Analysis:
The appeal challenged the penalty of Rs. 2 lakhs imposed on the appellant under Section 114 (i) & (iii) of the Customs Act, 1962 for failing to comply with Facility Notice No. 41/2009. The appellant, a Customs House Agent (CHA), was required to track online the details of shipping bills filed under their name and license number to prevent unauthorized filings. The penalty was confirmed in the adjudication, leading to an appeal before the Commissioner of Customs (Appeals). The appellant was directed to make a pre-deposit of Rs. 1,00,000, which was not complied with, resulting in the dismissal of the appeal for non-compliance.

The appellant argued that they were penalized solely for not adhering to the requirement of tracking shipping bills online as per Facility Notice No. 41/2009. They contended that the shipping bills related to the smuggling of Red Sanders were not reflected in the online data under their name, indicating no obligation on their part. The appellant claimed that unauthorized filings were made manually and not reflected online, absolving them of any wrongdoing. They cited precedents where similar proceedings against CHAs were dropped by the Tribunal, emphasizing the lack of evidence against them.

On the other hand, the Assistant Commissioner reiterated that the appellant failed to meet the requirements of Facility Notice No. 41/2009 as the relevant shipping bill details were not provided in their submissions. However, upon careful consideration, the Tribunal found that the appellant was not involved in filing the shipping bills for the smuggled consignment of Red Sanders. The records and explanations submitted indicated that the relevant shipping bills were not visible online, relieving the appellant of any responsibility. The Tribunal concluded that the penalty could only be imposed if the appellant knowingly participated in activities aiding the smuggling, which was not proven in this case. Therefore, the Tribunal held that the appellant's involvement or non-compliance with Facility Notice No. 41/2009 was not established, leading to the setting aside of the impugned order and allowing the appeal.

In the final judgment pronounced on 19/02/2016, the Tribunal overturned the penalty imposed on the appellant, emphasizing the lack of evidence linking them to the smuggling activities and highlighting the absence of online records as a crucial factor in determining their non-involvement.