2017 (3) TMI 589 - AT - Customs

Penalties u/s 112 (a) of CA, 1962 - imposition on the ground that the appellants have abetted an illicit transaction by the importer during the course of import of cargo vide bill of entry No. 7346736 dated 10/07/2012 of M/s Friends & Company - Held that - for imposition of penalty u/s 112, there should be a clear evidence to the conclusion that the appellants by their specific act or omission of any act, abetted the illegal importation of the offending goods - Admittedly, there is no evidence to this effect, recorded in the impugned order. The reason for imposition of penalty, is the appellants act of filing the bill of entry. Admittedly, at the time of filing the bill of entry the appellants did not get all the required documents to fulfill the KYC norms of the importer. Such act may attract proceedings, if at all, under the regulations for licensing of a CHA. For penalty under Customs Act, 1962 it is apparent that mere filing of bill of entry, without the knowledge or a role in the importation of cargo, is not sufficient - penalty set aside - appeal allowed - decided in favor of appellants.

Summary

Issues:
Imposition of penalties under Section 112(a) of the Customs Act, 1962 on the appellants for abetting an illicit transaction during the import of cargo.

Analysis:
The judgment pertains to two appeals against penalties imposed on the appellants under Section 112(a) of the Customs Act, 1962, for allegedly abetting an illicit transaction during the import of cargo. The impugned order was based on the appellants filing a bill of entry, which was later found to contain undeclared restricted goods. The appellants, a licensed CHA and an individual transacting with customs, argued that they withdrew from the transaction upon not receiving satisfactory KYC norms from the importer within two days of filing the bill of entry. They claimed ignorance of the cargo's nature and contended that their withdrawal before the detection of mis-declaration absolved them of abetment. The Customs Act requires clear evidence of abetment, which was found lacking in the impugned order. The judge noted that merely filing a bill of entry without knowledge or involvement in the importation is insufficient for penalty under the Customs Act. The appellants' withdrawal before detection and lack of evidence linking them to the importer or the offending goods supported their case. The judge referenced precedents emphasizing the need for tangible evidence to impose penalties on abettors.

The judge highlighted that the impugned order failed to provide substantial evidence establishing the appellants' liability for penalty. Therefore, the order imposing penalties on the appellants was set aside, and the appeals were allowed. The judgment underscores the necessity of concrete evidence to attribute abetment and impose penalties under the Customs Act, emphasizing the importance of factual support in such cases.