2019 (10) TMI 334 - AT - Customs

Imposition of penalty u/s 112(a) of CA on Customs Broker / CB - various irregularities committed by the main importers - no proceedings were initiated against the Customs Brokers alleging that by filing of Bill of Entry related to goods which are found liable for confiscation, the Customs Broker abetted such illegal import over past years - HELD THAT - The penalties have been imposed under Section 112(a) of the Customs Act. The said Section provides for imposition of penalty on any person who abets the doing or omission or any act or omission which will render the goods liable to confiscation. In other words, there should be a clear evidence to come to the conclusion that the appellants by their specific act or omission or any act abetted the illegal importation of offending goods. In the impugned order, no such evidence has been recorded. Further, for penalty under Customs Act, 1962, it is apparent that mere filing of Bill of Entry without the knowledge or of role in the importation of cargo is not sufficient. Penalties not warranted and is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalty imposed under Section 112(a) of the Customs Act on the appellant for alleged irregularities committed by main importers.

Analysis:
The appellant, engaged in Customs Broker activities, faced penalties for assisting in the import of goods. The Customs authority alleged irregularities and imposed penalties under Section 112(a) of the Customs Act. The appellant challenged the penalties through 6 appeals, arguing that the impugned orders did not consider their role properly. The appellant contended that no evidence linked them to the illegal importation of goods and cited previous Tribunal decisions where penalties were dropped in similar cases.

The appellant's counsel argued that the penalties were unjust as the Customs had not proven the appellant's involvement in the illegal imports. The counsel highlighted that the Tribunal had previously ruled in favor of the appellant in a similar case, emphasizing the lack of evidence connecting the appellant to the unlawful activities. Conversely, the Assistant Commissioner defended the penalties, stating that the appellant, by filing clearance documents with Customs, should bear responsibility for due diligence in import processes.

Upon reviewing the submissions and evidence, the Tribunal found that penalties were imposed under Section 112(a) of the Customs Act, which requires clear evidence of abetment in illegal activities. The Tribunal noted that the impugned order lacked such evidence and emphasized that merely filing a Bill of Entry without knowledge or involvement in the importation process was insufficient for penalty imposition. Citing precedent cases, the Tribunal highlighted the necessity of tangible evidence for penalty imposition and referred to specific judgments supporting the appellant's case.

In light of the lack of concrete evidence linking the appellant to the illegal imports and considering the precedent where penalties were dropped in similar cases, the Tribunal set aside the penalties imposed on the appellant in all 6 appeals. The Tribunal's decision was based on the principle that penalties under Section 112(a) require substantial evidence of abetment, which was not established in this case.