2017 (1) TMI 588 - AT - Customs

Imposition of penalty u/s 114(i), 114(iii) and 117 on CHA - mis-declaration of goods - overvaluation of goods to claim higher drawback - the appellant failed to verify the antecedents of the exporter, his identity and address, as was expected of CHA - Held that - the department has not brought any other evidence to prove that the appellant or his representative indulged in any activity to actively pursue the improper exportation. It stands admitted by Shri Vermani in his statements as well as in the present appeal, that there were lapses in complying with the norms regarding verification of the identity and antecedents of the exporters. However, we are of the view that such lapses are liable to be proceeded with by the Customs Department in terms of the Customs Broker Licensing Regulation, 2012. The conditions precedent for imposing penalty under Section 114 is absent in the facts of the present case. Section 117 provides for imposition of penalty not elsewhere specified for contravention of any of the provisions of this Act. We are of the view that the conduct of the appellant can be covered by the above section. Accordingly, we uphold the penalty imposed under Section 117 of the Customs Act. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Imposition of penalty under Sections 114(i), 114(iii), and 117 of the Customs Act, 1962 on a Custom House Agent (CHA) for alleged abetment in improper exportation of goods with intent to claim higher drawback.

Analysis:

Issue 1: Penalty under Section 114(i) and 114(iii)
The appellant, a CHA, was penalized for abetting improper exportation of goods. The appellant argued that lapses occurred due to the proprietor's health issues and that they did not gain from the drawback received by the exporter. The department alleged the appellant failed to verify exporter details, leading to improper exports. The tribunal found no evidence of active pursuit of improper exportation by the appellant. Lapses in verification were noted but deemed to fall under Customs Broker Licensing Regulation, not warranting penalty under Section 114. Citing the case of Nirmal Kumar Agarwal, the tribunal set aside the penalty under Section 114.

Issue 2: Penalty under Section 117
A penalty of Rs. one lakh was imposed under Section 117 for contravention not expressly mentioned elsewhere. The tribunal upheld this penalty, considering the appellant's conduct covered by this section. The appellant's failure to comply with duties under the Act justified the penalty under Section 117.

In conclusion, the tribunal modified the impugned order by setting aside the penalty under Section 114 and upholding the penalty under Section 117. The judgment was pronounced on 6.1.2017 by the tribunal members, Ms. Archana Wadhwa, and Mr. V. Padmanabhan.