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2021 (3) TMI 170 - AT - CustomsLevy of Penalty on CHA u/s 112 of Customs Act - mis-declaration during the physical examination of the goods - allegation is that the penalty on the ground that the CHA cannot absolve themselves from the wrong doings of the importers and that CHA has colluded with the importer to defraud the Revenue - HELD THAT - There is no material evidence with the Revenue to come to the conclusion that the appellant had the knowledge of the wrong doing of the importer and has colluded with the importer to defraud the Revenue. It is also found that the importer has also stated in his statement before the Original Authority in reply to Question No.10 that the CHA has filed the Bill of Entry based on the description on the invoice and there is no instruction by the importer to the CHA to do any wrong act. In the absence of any material evidence of knowledge and collusion between the appellant and the importer, it is not appropriate to punish the CHA for filing the document in good faith and on the basis of documents supplied by the importer. All the decisions relied upon by the appellant cited supra has consistently held that in order to impose penalty on the CHA under Section 112 of the Customs Act, there has to be a knowledge on the part of the CHA and there should be a collusion between the CHA and the importer in defrauding the Revenue - reliance can be placed in the case of ASHOK JAISWAR VERSUS COMMISSIONER OF CUSTOMS (ADJ.), MUMBAI-I 2006 (2) TMI 416 - CESTAT, NEW DELHI . The penalty imposed is not sustainable in the absence of any specific role performed by the appellant in the wrong doing done by the importer - appeal allowed - decided in favor of appellant.
Issues:
Appeal against penalty under Section 112 of Customs Act for mis-declaration by CHA acting on behalf of importer. Analysis: The appeal was against the penalty imposed under Section 112 of the Customs Act on the appellant, a Customs House Agent (CHA), for mis-declaration by the importer, M/s Networkers Eduhome Pvt. Ltd. The appellant filed the Bill of Entry based on the importer's instructions and supporting documents. Customs found mis-declaration during physical examination, leading to a penalty of ?1 Lakh. The appellant claimed innocence, stating reliance on importer's documents and lack of knowledge about mis-declaration. The Commissioner (Appeals) upheld the penalty, citing collusion between CHA and importer. The appellant challenged this decision. The appellant argued that the impugned order lacked proper appreciation of facts, evidence, and legal precedents. He contended that there was no evidence establishing his knowledge or collusion with the importer. The importer's statement indicated that the CHA filed the Bill of Entry based on the invoice description without specific instructions. The appellant emphasized that without evidence, holding CHA liable for importer's actions was unjust. He cited legal precedents supporting the requirement of CHA's knowledge and collusion for imposing penalties under Section 112. The Authorized Representative (AR) reiterated the findings of the impugned order, supporting the penalty on the appellant. However, upon considering submissions and evidence, the Tribunal found no material proof of the appellant's knowledge or collusion with the importer. The Tribunal noted the importer's statement absolving the CHA of specific instructions for mis-declaration. Relying on legal precedents, the Tribunal emphasized the necessity of CHA's active involvement in fraudulent activities for penalty imposition. Referring to a specific case, the Tribunal highlighted the requirement of positive evidence of CHA's participation in fraudulent acts. Ultimately, the Tribunal set aside the penalty, concluding that it was unsustainable due to the lack of evidence showing the appellant's direct involvement in the importer's mis-declaration. The decision was based on legal precedents and the absence of a specific role played by the CHA in the wrongdoing. The appellant's appeal was allowed, and the penalty was revoked.
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