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2018 (5) TMI 165 - AT - CustomsPenalty u/s 112 (a) of the Customs Act, 1962 on CHA - failure to discharge the obligations of provisions of Section 13 (d)(e) Custom House Agent Licensing Regulations, 2004 - Held that - the impugned order examined the role of the appellant as CHA in terms of Regulation 13 of CHALR. However, no proceedings at all have been initiated under CHALR as could be seen from the appeal records - under the Regulation itself, no action has been initiated. The penal provisions under Section 112(a) are much more comprehensive and serious compared to violation of obligations of CHA under the Regulation. The violation of abetting an offence has to be established by evidence of deliberate act or omission by the CHA. Penalty not warranted - appeal allowed - decided in favor of appellant.
Issues:
- Imposition of penalty under Section 112(a) of the Customs Act, 1962 on a Customs House Agent (CHA) for mis-declaration of goods. - Interpretation of the obligations of a CHA under Section 13(d)(e) of the Custom House Agent Licensing Regulations, 2004. - Justification of penalty under Section 112(a) in the absence of proceedings under CHALR 2004/CBLR 2013. Analysis: 1. Imposition of Penalty under Section 112(a): The appeal challenged the penalty imposed on the appellant, a CHA, under Section 112(a) of the Customs Act, 1962. The Original Authority imposed a penalty of ?5 lakh for mis-declaration of goods imported by M/s.Creative International. The appellant contested that the act of filing the bill of entry as a CHA cannot be penalized under Section 112(a) as no specific violation of the Customs Act was identified. The Tribunal noted that the penalty under Section 112(a) can be imposed on a person in relation to goods who does or omits to do an act rendering the goods liable to confiscation. However, in this case, no evidence was presented to establish deliberate abetting of an offense by the CHA. The Tribunal found the penalty imposed under Section 112(a) not justified in the absence of clear evidence of violation, setting aside the penalty and allowing the appeal. 2. Interpretation of CHA Obligations under CHALR 2004: The Original Authority held that the appellant, acting as a CHA, failed to fulfill the obligations under Section 13(d)(e) of the Custom House Agent Licensing Regulations, 2004. The Tribunal observed that the CHALR covered the obligations of the appellant as a CHA, and failure to fulfill these obligations was cited as the basis for imposing the penalty under Section 112(a). However, the Tribunal noted that no proceedings were initiated under CHALR, as evidenced by the appeal records. The Tribunal emphasized that the penal provisions under Section 112(a) are more serious compared to violations of CHA obligations under the Regulation. Without clear evidence of deliberate acts or omissions by the CHA leading to an offense, the Tribunal found the imposition of penalty under Section 112(a) based solely on CHALR obligations unjustified, ultimately setting aside the penalty. 3. Absence of Proceedings under CHALR 2004/CBLR 2013: During the proceedings, the Tribunal specifically inquired whether any actions were taken under CHALR 2004/CBLR 2013 for violations of these Regulations. The appellant provided a written undertaking stating that no action had been taken against them under these Regulations. The Tribunal highlighted the lack of evidence of any proceedings initiated under CHALR 2004/CBLR 2013, further reinforcing the lack of justification for imposing a penalty under Section 112(a) solely based on the appellant's failure to fulfill CHA obligations under CHALR 2004. The absence of any action under the Regulations undermined the basis for the penalty, leading the Tribunal to set it aside and allow the appeal. In conclusion, the Tribunal's detailed analysis focused on the lack of evidence establishing deliberate acts or omissions by the CHA under the Customs Act or CHALR 2004, leading to the setting aside of the penalty imposed under Section 112(a) on the appellant. The judgment emphasized the need for clear justification and evidence when imposing penalties under the Customs Act, particularly in cases involving CHAs and their obligations under relevant regulations.
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