2017 (10) TMI 1137 - AT - Customs

Penalty on CHA - Regulation 18 read with Regulation 20 & 22 of CABLR 2013 read with Regulation 20(1) read with Regulation 22 of CHALR 2014 - illegal export of granite slabs - no proceedings were initiated for revocation of CHA License - Held that - In the case of Vikrant Gogia Vs. CC Delhi 2016 (11) TMI 1468 - CESTAT NEW DELHI also the penalty was dropped against the customs broker in a situation where the customs authorities held that the revocation of the CHA license as proposed by the Revenue is not warranted - Admittedly in this case also, the Ld. Commissioner has held that the revocation of customs broker license is not warranted. Penalty set aside - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Imposition of penalty under Regulation 18 read with Regulation 20 & 22 of CABLR 2013 and Regulation 20(1) read with Regulation 22 of CHALR 2014 on the appellant.
2. Alleged misuse of Customs Broker License by an employee of the appellant for illegal export activities.
3. Examination of the appellant's involvement and authorization in the illegal export activities.
4. Determination of whether the appellant failed to supervise their employee properly.

Issue-wise Detailed Analysis:

1. Imposition of Penalty:
The appellant faced a penalty of ?50,000/- under the relevant regulations for each case due to alleged violations. The appeals were consolidated into a common order due to identical facts and observations.

2. Alleged Misuse of Customs Broker License:
The appellant, a customs broker, was implicated in a case where a gang of smugglers attempted to export red sanders illegally. The containers involved were linked to M/s. Velocity Impex, which filed the shipping bills. The illegal export of red sanders was treated separately, while the present notices focused on the misuse of the Importer Exporter Code (IEC) for exporting granite slabs.

3. Examination of Appellant's Involvement:
The appellant argued that Shri Pandiri Praveen Kumar, an employee, misused their Customs Broker License without their knowledge. The appellant claimed no direct involvement in the shipment and no authorization was given to Shri Pandiri Praveen Kumar for the shipment. The enquiry officer's report supported this, stating that the appellant did not play a specific role in the case and that Shri Pandiri Praveen Kumar acted independently without authorization.

4. Determination of Supervision Failure:
The enquiry officer concluded that the appellant did not violate regulations 11(a), 11(d), 11(e), 11(m), and 11(n) of CBLR 2013. However, it was noted that the appellant failed to inform the department about the termination of Shri Pandiri Praveen Kumar, which implied a lack of proper supervision, violating regulation 17(9) of CBLR 2013. Despite this, the penalty was deemed unsustainable due to the lack of evidence proving the appellant's knowledge or involvement in the illegal activities.

Judgment:
The Tribunal referenced previous cases, such as Buhariwala Logistics Vs. CC New Delhi, where penalties were set aside due to the lack of evidence of the customs broker's knowledge of their employee's illegal activities. In this case, the Tribunal found that the appellant was unaware of Shri Pandiri Praveen Kumar's actions and had not authorized him. Consequently, the penalties imposed on the appellant were set aside, and the appeals were allowed with consequential relief.

Conclusion:
The Tribunal concluded that no penalties could be imposed on the appellant due to the absence of evidence showing their involvement or knowledge of the illegal activities conducted by their employee. The appeals were allowed, and the penalties were set aside.

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