2022 (3) TMI 369 - AT - Customs

Seeking to reconsider the non-imposition of penalty under sec. 114 and 114AA of the Customs Act, 1962 - smuggling - red sanders - HELD THAT - The findings arrived by the adjudicating authority as to whether there is any involvement of the appellant who is a Customs Broker has already been reproduced. The adjudicating authority has categorically held that the appellant has not done any act of omission or commission which has made the goods liable for confiscation. Further, in the Show Cause Notice, there is no allegation that the appellant had done any act facilitating the attempt to smuggle red sanders. The statement of Shri Mahimai David shows that he had collected the documents from the exporter and the same were submitted to the appellant to file the shipping bill. Nothing is brought out in the nature of evidence to establish that the appellant had done or omitted to do any act intentionally. The alleged contraventions come within the CBLR, 2013 only - When there is no evidence to establish any overt act or mens rea to facilitate the commission of offence, the finding of the Commissioner (Appeals) that the appellant has facilitated the attempt to smuggle red sanders is without any factual and legal basis and cannot sustain. The order passed by the Commissioner (Appeals) is without correctly appreciating the facts or the provisions of the law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Non-imposition of penalty under sec. 114 and 114AA of the Customs Act, 1962 on the appellant.

Detailed Analysis:

Issue 1: Non-imposition of Penalty
The case involved attempts to smuggle red sanders from Chennai Port, where the Customs Broker, the appellant, filed a shipping bill for M/s. Universal Concrete Technology. The adjudicating authority ordered confiscation of red sanders and imposed penalties on others but dropped penalties proposed against the appellant under sections 114 and 114AA of the Customs Act, 1962.

Issue 1 Analysis:
The Commissioner (Appeals) remanded the matter to reconsider imposing penalties on the appellant. The appellant argued that they had no knowledge of smuggling and had not facilitated it. The adjudicating authority found no involvement of the appellant in the smuggling activity. The Show Cause Notice alleged contravention of Customs Broker Regulations, not direct involvement in smuggling.

Issue 2: Legal Interpretation
The Commissioner (Appeals) held that the appellant facilitated smuggling by not verifying the exporter's authenticity. However, the appellant had obtained necessary authorizations before filing the shipping bill and had no knowledge of the smuggling attempt. The Commissioner's findings were based on assumptions.

Issue 2 Analysis:
The appellant's actions were found to be in compliance with regulations, and there was no evidence of intentional facilitation of smuggling. The allegations against the appellant pertained to Customs Broker Regulations violations, not direct involvement in smuggling activities.

Issue 3: Applicability of Penalties
The appellant argued that penalties under sections 114 and 114AA of the Customs Act, 1962 were not warranted for violations under Customs Broker Regulations. The appellant had filed the shipping bill based on documents received and had not actively colluded in the smuggling attempt.

Issue 3 Analysis:
The appellant's compliance with regulations and lack of direct involvement in smuggling activities were highlighted. The Tribunal found that the penalties proposed against the appellant were not justified under the Customs Act, 1962, as the appellant had not abetted the offense and had fulfilled their obligations as a Customs Broker.

In conclusion, the Tribunal set aside the Commissioner (Appeals) order, ruling in favor of the appellant due to the lack of factual and legal basis for imposing penalties under sections 114 and 114AA of the Customs Act, 1962. The appeal was allowed, providing consequential relief to the appellant.