2020 (2) TMI 764 - AT - Customs

Imposition of penalty - Smuggling - Red Sanders - positive act or omission or abatement on the part of the Appellant - whether in the facts and circumstances of the case there is sufficient reasoning has been given by this bench while imposing penalty of ₹ 15, 00,000 on the appellant? - HELD THAT - In order to be liable for penalty, in terms of Section 114 of Customs Act, 1962, a person has to do or omit to do any act which act or omission would render such goods liable to confiscation under Section 113, or abet the doing or omission of such an act. Going by the wordings of the Section, it is apparent that there should be positive act or omission or abatement on the part of the Appellant so as to render him liable for penalty - Ld. Commissioner (Appeals) has observed that while the Show Cause Notice seeks to impose penalty for connivance, the Adjudicating Authority has imposed penalty for abatement. Accepting the documents from Shri Sujan Sharma and receiving payment in cash do not in themselves constitute an offence punishable under Customs Act, 1962. No case has been made by the department that there was some positive act or abetment of the smuggling by the appellant. In fact as a Customs Broker, his role has not even begun as the said goods have been apprehended well before they reached the port. There is no whisper leave alone evidence that the appellant was aware of the fact that Red Sanders logs were stuffed in the container and were to be exported in the consignment for which they have received authorization. The appellant has not rendered himself liable for penalty under Section 114 of Customs Act, 1962 - Appeal dismissed - decided against appellant.

Summary

Issues:
- Imposition of penalty under Section 114 of the Customs Act based on alleged involvement in smuggling activities.
- Evaluation of evidence and reasoning for imposing penalties.
- Applicability of Customs Brokers Licensing Regulations in determining liability for penalties.

Analysis:

Issue 1: Imposition of penalty under Section 114 of the Customs Act
The judgment revolves around the imposition of a penalty on the Appellant under Section 114 of the Customs Act, 1962, due to alleged involvement in smuggling activities related to the attempted illegal export of Red Sanders. The case involved a CHA who was accused of abetting the smuggling attempt. The key contention was whether the Appellant's actions rendered them liable for penalties under the Customs Act.

Issue 2: Evaluation of evidence and reasoning for imposing penalties
The Tribunal analyzed the evidence presented by both parties. The Appellant argued that the allegations against them were not substantiated, emphasizing that their role as a CHA had not commenced at the time of the seizure in Bihar. The Revenue, on the other hand, highlighted the involvement of a habitual offender who engaged the services of the Appellant, alleging connivance in smuggling activities. The Tribunal scrutinized the specifics of the case to determine whether the Appellant's actions met the criteria for penalty under Section 114 of the Customs Act.

Issue 3: Applicability of Customs Brokers Licensing Regulations
The Tribunal also addressed the applicability of Customs Brokers Licensing Regulations in determining the Appellant's liability for penalties. Despite references to violations of regulations, the Tribunal found that mere acceptance of documents and receipt of cash payments did not automatically constitute an offense punishable under the Customs Act. The Tribunal emphasized the lack of concrete evidence linking the Appellant to knowledge of the smuggling activities, ultimately concluding that the Appellant had not rendered themselves liable for penalties under the Customs Act.

In conclusion, the Tribunal dismissed the appeal, stating that the Appellant had not committed any acts or omissions that would make them liable for penalties under Section 114 of the Customs Act. The judgment highlighted the importance of concrete evidence and a clear link between the accused party's actions and the alleged offense in imposing penalties under the Customs Act.