2017 (8) TMI 1031 - AT - Customs

Penalty u/s 117 of CA on CHA - misdeclaration of description of goods - Held that - During the relevant period (prior to 10.05.2008) the maximum penalty that can be imposed under that Section is ₹ 10,000/- and therefore the penalty imposed in our view is highly excessive. The appellants have issued a letter requesting for permission to move the container specifically to Raja CFS. The letter head is that of the appellant. The strong contention of the Ld. Counsel for the appellant is that the appellant had no contact with the importer and that the appellant had not filed the Bill of Entry. It is seen that as per facility intimation No. 13/2006 dated 23.08.2006 an application along with letter dated 18.05.2007 was filed for movement of the container to Raja CFS. The appellant being CHA ought to have verified the genuineness before issuing such letter. From the submissions made as well as perusal of records, we do not find grounds for setting aside the penalty in toto. We therefore hold that imposing penalty of ₹ 10,000/- would meet the ends of justice. Appeal allowed - decided partly in favor of appellant.

Issues: Illegal diversion and attempted unloading of imported goods, involvement of various parties in the smuggling activity, imposition of penalties by the original authority, challenge of penalties before the Tribunal, determination of penalty amount under Section 117 of the Customs Act, 1962.

Analysis:
1. The case involved the illegal diversion and attempted unloading of imported goods, including a Mitsubhishi PAJERO Car, television sets, and washing machines, concealed behind chick peas bags. The goods were smuggled into India under the guise of chick peas, leading to their seizure by the Directorate of Revenue Intelligence (DRI) officers.

2. Various individuals and entities were implicated in the smuggling activity, including Shri V. Selvakumar, Shri A. Dinesh, M/s. SMT Logistics, M/s. International Cargo Clearing Agent, M/s. Trans Asian Shipping Services, and M/s. BWC Logistics (P) Ltd. Statements from witnesses and examination of individuals revealed the chain of events leading to the detection of the smuggling operation.

3. The original authority imposed penalties on the appellants under Section 117 of the Customs Act, 1962. The penalties amounted to ?1,00,000 on M/s. International Cargo Agents and M/s. SMT Logistics, and ?50,000 on M/s. Trans Asian Shipping Services (P) Ltd. The appellants challenged these penalties before the Tribunal.

4. During the hearing, the appellants argued that they were not directly involved in the smuggling act, as they had only facilitated the movement of the container from the port to the Container Freight Station (CFS) pending customs clearance. They contended that since they did not file the Bill of Entry, the proceedings against them were null and void.

5. The Tribunal considered the submissions from both sides and examined the records. It noted that the penalty imposed under Section 117 of the Customs Act was excessive, as the maximum penalty prior to 10.05.2008 was ?10,000. The Tribunal found that while the appellants had issued a letter requesting permission to move the container to Raja CFS, they should have verified the authenticity of the request before issuing the letter.

6. Ultimately, the Tribunal modified the impugned order, reducing the penalty imposed on M/s. International Cargo Agents to ?10,000. The appeal (No. C/356/2008) was partly allowed on this basis.

This detailed analysis highlights the smuggling operation, the involvement of various parties, the imposition of penalties, the challenge before the Tribunal, and the final decision to reduce the penalty amount based on legal provisions.

← Previous Next →