2016 (6) TMI 506 - AT - Customs

Imposition of penalty on CHA - Section 117 of the Customs Act 1962 - Difference in number of ladies stitch suits - Held that - the provisions of section 117 which provides for imposition of penalty on any person who contravenes any provision of the Act or asserts any such contravention and fails to comply with any provisions of the Act. In the present case there is no finding by Commissioner (A) that the appellant abetted with exporter so as to intentionally declare the excess number of ladies suits or as to allow the exporter to claim excess drawback. This seems to be a clear case of human error, wherein 977 suits were mentioned in the EDI as 1977 suits. The said factor would admittedly be incapable of being termed as abetment. As such by extending the benefit of doubt to the appellant who is a CHA only, the imposition of penalty of ₹ 50,000/- is aside. - Decided in favour of appellant with consequential relief

Summary

Issues:
Imposition of penalty on a Customs House Agent (CHA) under section 117 of the Customs Act 1962 for discrepancies in cargo documentation.

Analysis:
1. The appellant, a CHA, was penalized &8377; 50,000 for discrepancies in the number of ladies stitch suits declared in a shipment. The appellant argued that his role was limited to document presentation and assisting customs officers, denying any involvement in the discrepancies.

2. The Commissioner (A) upheld the penalty, stating that the CHA was largely responsible as the G-Card holder filed the documents under CHA's instruction. The Commissioner found the penalty appropriate under section 117, setting aside penalties under sections 114 and 114 AA due to lack of "mens rea."

3. The appellant contended that the discrepancy was a human error and that the absence of "mens rea" should preclude penalty imposition under section 117. The appellant argued that the appellate authority's acknowledgment of no "mens rea" should nullify the penalty.

4. Section 117 allows penalties for contraventions of the Act without requiring "mens rea." However, the Tribunal found no evidence of the CHA abetting the exporter in the discrepancies. The Tribunal deemed the error a human mistake, not abetment, leading to the penalty's reversal.

5. The Tribunal set aside the penalty of &8377; 50,000 on the CHA, granting relief based on the benefit of doubt. The judgment highlighted the CHA's limited role and lack of intentional wrongdoing, concluding that the penalty imposition was unjustified in the absence of abetment.

This detailed analysis covers the issues raised in the judgment, the arguments presented, and the legal reasoning behind the decision to reverse the penalty imposed on the CHA under section 117 of the Customs Act 1962.