2019 (6) TMI 371 - AT - Customs

Imposition of penalty on CHA - it was found that the importer had availed irregular exemption from payment of Basic Custom Duty in respect of the items imported by them and it was also found that the present appellant had failed to advise the importer about the correct classification of the imported goods - Regulation 11(d) and 11(e) of CBLR - HELD THAT - Commissioner of Custom after considering the report of the Inquiry Officer came to the conclusion that the appellant had neither abetted mis-declaration of the goods nor benefited from their acts and therefore, the suspension of license was revoked but still imposed penalty of ₹ 50,000/- without mentioning any provision under which the said penalty was imposed. Once the appellant had not committed any offence under the Customs Act as well as under the CBLR Regulations, then imposition of penalty is not warranted on the appellant. Penalty not warranted - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against imposition of penalty of ?50,000 for alleged failure to advise importer on correct classification of goods.

Analysis:
The appeal was filed against the impugned order by the Commissioner of Customs revoking the suspension of the Custom Broker license but imposing a penalty of ?50,000 on the appellant. The case involved an importer evading payment of custom duty by irregularly availing exemption from Basic Custom Duty. Statements were recorded, and documents seized during the investigation. The appellant was found to have failed to advise the importer correctly on the classification of goods, leading to proceedings under Custom Broker Licensing Regulations (CBLR), 2013. The show-cause notice issued to the appellant alleged contravention of CBLR, 2013, leading to the penalty imposition.

The appellant argued that the penalty was unjustified as no specific basis was provided for its imposition. It was contended that the appellant had not abetted mis-declaration and had a clean track record, being awarded as a top Custom House Agent. The appellant cited legal precedents to support the argument that in cases where license revocation is not warranted, the imposition of a penalty is also not justified. The appellant emphasized that in matters of goods classification, the Custom Broker cannot be held responsible when acting on information provided by the importer.

The respondent defended the penalty imposition, citing the appellant's failure to exercise due intelligence in verifying information as required under CBLR Regulations. However, the Tribunal found that the Commissioner had revoked the license suspension based on the finding that the appellant did not abet mis-declaration or benefit from the acts. The Tribunal noted that since no offense was committed under the Customs Act or CBLR Regulations, the penalty imposition was unwarranted. Relying on legal precedents, the Tribunal concluded that the penalty of ?50,000 was not justified under the law and allowed the appeal of the appellant, setting aside the penalty.