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2018 (11) TMI 580 - AT - CustomsPenalty u/s 112 and 114AA of CA - failure to carry out due diligence in establishing bona fide of importer and failure to produce the importer for cross examination by Customs Authorities - Held that - The Customs Brokers are temporarily engaged by the companies or firms for assisting them in processing of documents and assessments of goods for clearance after import or for clearance for the purpose of export. The said regulations and other provisions of the Customs Act that the obligations and responsibility of the Customs Brokers end once the goods are examined by Customs Authorities and orders for out of charge are issued and the goods are cleared from the control of Customs on importation. It is not free from doubt that when the goods were cleared from customs control they were not Velvet Fabric but they were Knitted Polyester Fabric as declared by the importer. Penalty set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Allegations of failure to show due diligence by the appellants under Customs Brokers Licensing Regulations, 2013. 2. Imposition of penalties under Sections 112 and 114AA of Customs Act, 1962 on the appellants. 3. Examination of the obligations and responsibilities of Customs Brokers under the said regulations and provisions of the Customs Act. 4. Lack of evidence regarding mis-declaration of goods and imposition of penalties on the present appellants. Analysis: Issue 1: Allegations of failure to show due diligence by the appellants under Customs Brokers Licensing Regulations, 2013 The case involved allegations against the appellants for not demonstrating due diligence as required under the Customs Brokers Licensing Regulations, 2013. The obligations of Customs Brokers were outlined in Regulation 11 of the said regulations, which highlighted their role in assisting companies or firms with document processing and goods clearance. The appellants were accused of failing to fulfill their duties as Customs House Agents, leading to penalties being imposed on them under Sections 112 and 114AA of the Customs Act, 1962. Issue 2: Imposition of penalties under Sections 112 and 114AA of Customs Act, 1962 on the appellants The Original Authority imposed penalties of ?2 lakhs each under Section 112 and ?1 lakh each under Section 114AA of the Customs Act, 1962 on all three appellants for their alleged failure to discharge their duties as Customs House Agents. The penalties were based on the findings recorded in the impugned Order-in-Original, which concluded that the appellants did not fulfill their obligations, resulting in the evasion of customs duty. Issue 3: Examination of the obligations and responsibilities of Customs Brokers under the said regulations and provisions of the Customs Act Upon reviewing the allegations and the relevant regulations, the Tribunal observed that the obligations and responsibilities of Customs Brokers typically conclude once the goods are examined by Customs Authorities and cleared from their control. In this case, the goods were cleared from the control of customs at ICD Dadri after completing all formalities. The Tribunal noted that the proceedings did not provide clarity on how the Customs Authorities failed to detect the mis-declaration of goods during examination, raising doubts about the imposition of penalties on the present appellants under the Customs Act. Issue 4: Lack of evidence regarding mis-declaration of goods and imposition of penalties on the present appellants The Tribunal found a lack of evidence supporting the mis-declaration of goods and the subsequent imposition of penalties on the present appellants. Noting the absence of statements from the responsible officers who examined the goods before clearance, the Tribunal concluded that there was insufficient justification for penalizing the appellants under the Customs Act. Consequently, the impugned order concerning the present appellants was set aside, and all three appeals were allowed. This detailed analysis highlights the key issues raised in the judgment, focusing on the allegations, penalties imposed, examination of obligations, and the lack of evidence regarding mis-declaration of goods.
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