2017 (6) TMI 147 - AT - Customs

Imposition of penalty u/s 112(a) of the CA, 1962 on CHA - misdeclaration as to the country of origin and evasion of Anti-Dumping duty - penalty was imposed on the appellant on the ground that the CHA had not bothered to check the authenticity and the genuineness of the declaration in the invoice and the Bills of Entry and simply put their signature on the Bills of Entry as the importer s Agent as per section 46(4) of the Act, 1962 - Held that - Section 112(a) provides that any person, who in relation to any goods does or omits to do any act, which act or omission, would render such goods liable to confiscation under section 111 or abets the doing or omission of such an act, shall be liable to a penalty - In the present case, there is no material available on record that the appellant CHA was involved with the importer of the allged offence committed by the importer. In absence of the material evidence on record to show that the CHA connived with the importer in misdeclaration with intent to evade payment of duty, penalty on CHA u/s 112 is unwarranted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Imposition of penalty under section 112(a) of the Customs Act, 1962 on a Customs House Agent (CHA) for alleged misdeclaration of goods and evasion of Anti-Dumping duty.

Detailed Analysis:

Issue 1: Alleged misdeclaration of goods and imposition of penalty:
The case involved the imposition of a penalty on a Customs House Agent (CHA) under section 112(a) of the Customs Act, 1962 for alleged misdeclaration of goods and evasion of Anti-Dumping duty. The appellant, a CHA, appealed against the penalty imposed by the Commissioner of Customs(Port). The appellant argued that they had filed Bills of Entry based on documents provided by the importer, maintaining that they had correctly described the goods as per the invoice. The appellant contended that they cannot be considered an importer under the Customs Act, 1962, and there was no evidence of ill motive in their actions. The Revenue, represented by the ld.AR, supported the findings of the Adjudicating Authority.

Issue 2: Obligations of a Customs House Agent (CHA) under section 46(4) of the Act, 1962:
The Adjudicating Authority observed that the penalty was imposed on the appellant as the CHA had failed to verify the authenticity of the declaration in the invoice and Bills of Entry. It was noted that the CHA did not fulfill their obligations under section 46(4) of the Act, 1962 by not scrutinizing the documents properly and providing accurate information. The department's assumption regarding the country of origin of the goods and the evasion of Anti-Dumping duty was considered appropriate based on the evidence presented.

Issue 3: Distinction between importer's declaration and CHA's obligations:
The Tribunal analyzed the distinction between the declaration made by the importer and the obligations of the CHA under section 46 of the Act, 1962. It was highlighted that the declaration in the Bill of Entry is the statutory duty of the importer, while the CHA's declaration is based on the documents provided by the importer. The Tribunal referred to previous judgments to emphasize that unless there is clear evidence of the CHA's involvement in misdeclaration with intent to evade duty, imposing penalties on the CHA is unwarranted.

Conclusion:
After considering the arguments presented by both sides and examining relevant legal provisions and precedents, the Tribunal found that there was insufficient evidence to justify the penalty imposed on the appellant CHA. The Tribunal referred to previous judgments where penalties on CHAs were set aside due to lack of evidence of connivance with importers in misdeclaration. Consequently, the penalty imposed on the appellant was set aside, and the appeal filed by the appellant was allowed, emphasizing the importance of evidence and clear proof of CHA's involvement in any alleged misdeclaration or evasion of duty.