2022 (5) TMI 148 - AT - Customs

Levy of Penalty on appellant CHA u/s 114(i) of the Customs Act - export of prohibited goods or not - appellant is negligent in performing their duty as a CHA - acceptance of work order through the freight forwarder - HELD THAT - It is found that the appellant has received full set of documents through the freight forwarder and there was no reason for him to doubt the genuineness of the exporter. Further, as the goods were factory stuffed and sealed, the appellant-CHA has no reason to doubt any malpractice on the part of the exporter. Thus, under the facts and circumstances, no case of abetment in attempted export of prohibited goods, against the appellant is made out. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the penalty of Rs. 1 lakh imposed on the appellant-CHA under Section 114(i) of the Customs Act was justified.

Issue-wise Detailed Analysis:

1. Penalty Imposition under Section 114(i) of the Customs Act:
- Facts of the Case: The case involves the appellant-CHA who filed export documents for M/s All Craft Exports intending to export wooden floor lamps and Jaipur benches. During examination, discrepancies were found including concealed sandalwood and red sanders wood in the shipment, which are prohibited for export under Schedule 2 of ITC (HS).
- Investigation Findings: The investigation revealed that the appellant-CHA received all necessary export documents through Md. Hasan Khan, a freight forwarder. The goods were factory stuffed and sealed, and the CHA had no direct contact with the exporter. Statements from various individuals involved, including the driver and the freight forwarder, were recorded under Section 108 of the Customs Act. The investigation also involved searches at the premises of individuals connected to the export, revealing further evidence of prohibited goods and potential forgery.
- Adjudication: The Adjudicating Authority held that the appellant-CHA was negligent in performing their duty by not directly verifying the documents from the exporter, thus imposing a penalty of Rs. 1 lakh under Section 114(i). However, the penalty under Section 114AA was dropped.
- Appellant's Argument: The appellant argued that they obtained all necessary documents for verification and had no authority to inspect the goods, which were sealed by the Department officers. They contended that there was no reason to doubt the genuineness of the exporter as all documents, including the IEC code, were found to be true. The appellant also highlighted that there was no allegation of receiving extraordinary remuneration or having knowledge of the prohibited goods.
- Tribunal's Decision: The Tribunal found that the appellant-CHA had no reason to doubt the genuineness of the exporter or the goods as they were factory stuffed and sealed. It was determined that no case of abetment in the attempted export of prohibited goods was made out against the appellant. Consequently, the impugned order imposing the penalty was set aside, and the appeal was allowed.

Conclusion:
The Tribunal concluded that the appellant-CHA was not guilty of abetment in the attempted export of prohibited goods due to the lack of direct contact with the exporter and the factory-sealed nature of the goods. The penalty of Rs. 1 lakh imposed under Section 114(i) of the Customs Act was set aside, and the appeal was allowed.