2022 (8) TMI 238 - AT - Customs

Levy of penalty on the appellant u/s 112(b) of the Customs Act, 1962 of the Customs Act - smuggling of cigarettes of foreign origin from Singapore - HELD THAT - The only allegation against this appellant is that he introduced the actual importer Habib-uz-Zaman and Badi-uz-Zaman to the IEC holder, who agreed for the use of his IEC on consideration agreed to be provided by Habib-uz-Zaman. Thereafter, there is no role of this appellant forthcoming. None of the co-noticee has stated anything against this appellant save and except that he has introduced the importer and the IEC holder. Thus, none of the condition as stipulated in Section 112(b) of the Act is attracted for imposing penalty - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of penalty under Section 112(b) of the Customs Act, 1962 on the appellant.

Analysis:
- The appellant, a clearing agent, did not have a CHA/CB license and was involved in facilitating the import of marbles by introducing an IEC holder to the actual importer. The appellant denied knowledge of improper imports of cigarettes and was not involved in clearance of the consignment.
- The investigation revealed the smuggling of cigarettes in a container declared to contain corrugated boxes, implicating various individuals, including the appellant, in the import of the contraband.
- A show cause notice proposing confiscation and penalties was issued, leading to the imposition of penalties on different parties, including a Rs. 10 lakhs penalty on the appellant under Section 112(b) of the Customs Act, 1962.
- The Commissioner (Appeals) upheld the penalty, stating that the appellant arranged the meeting between the IEC holder and the actual importer and undertook to arrange custom clearance.
- The appellant contested, arguing that he only facilitated the meeting and did not file the bill of entry or participate in clearance activities, challenging the application of penalty under Section 112(b).
- The Tribunal found that the appellant's role was limited to introducing the importer and the IEC holder, with no evidence of involvement in activities specified under Section 112(b), leading to the setting aside of the penalty imposed on the appellant.
- Citing precedents and legal principles, the Tribunal emphasized the necessity of proving a person's role before imposing penalties, ultimately allowing the appeal in favor of the appellant.

This detailed analysis of the judgment highlights the circumstances leading to the imposition of the penalty, the arguments presented by the appellant, the findings of the Tribunal, and the legal principles applied in reaching the decision to set aside the penalty under Section 112(b) of the Customs Act, 1962.