2018 (9) TMI 1386 - AT - Customs

Penalty u/s 112(b) of the Customs Act, 1962 - penalty was imposed based on the statement recorded under summon from the Country Manager of the importer - Held that - On perusal of the statements recorded from both the officers of the importing firm, it is found that one Shri Alok Gulla (CHA firm M/s. R.B. Ramnath) had advised the importing firm to change the classification of the impugned goods. The statements recorded under Section 108 of the Act from the above persons do not specifically mention the name of the appellant for misguiding the importer for effecting any change in the classification of impugned goods. The provisions of Section 112(b) of the Act cannot be invoked for imposition of penalty on the appellant - Appeal allowed - decided in favor of appellant.

Summary

Issues: Imposition of penalty under Section 112(b) of the Customs Act, 1962 on the appellant.

Analysis:
1. Facts of the Case: The case involved the import of "pre-printed plastic card with magnetic stripe without chip" by M/s. DZ Card (India) Pvt. Ltd., classified under CTH 35235290. The Customs officers found that the goods should have been classified under CTH 85232100, leading to a discrepancy in the duty paid by the importer.

2. Initiation of Proceedings: The Central Intelligence Unit initiated show cause proceedings against the importer for duty liability and penalty imposition due to the misclassification of goods. The appellant, who was also proposed for penalty, was part of the proceedings.

3. Appellant's Defense: The appellant's advocate argued that the appellant did not advise the importer to change the classification of the goods. Referring to statements from the importer's representatives, it was claimed that the appellant was not responsible for the misclassification leading to the penalty.

4. Revenue's Position: The Revenue, represented by the Departmental Representative, supported the findings of the impugned order, maintaining the imposition of penalty on the appellant.

5. Court's Evaluation: After hearing both sides and examining the case records, the court noted that the penalty on the appellant was based on a statement from the importer's Country Manager, implicating a different Customs House Agent (CHA) for advising the misclassification. The court found that the statements did not specifically implicate the appellant in misleading the importer regarding the classification of goods.

6. Decision: The court held that the provisions of Section 112(b) of the Customs Act could not be invoked to penalize the appellant as there was no direct evidence linking the appellant to the misclassification. Consequently, the court set aside the penalty imposed on the appellant and ruled in favor of the appellant, allowing the appeal.

This detailed analysis of the judgment highlights the key aspects of the case, including the factual background, arguments presented by both parties, court's evaluation of the evidence, and the final decision reached by the court, providing a comprehensive understanding of the legal issues involved in the imposition of penalty under Section 112(b) of the Customs Act, 1962.