2023 (3) TMI 182 - AT - Customs

Levy of penalty u/s 114 of CA - contravention of provisions of Section 113 of the Customs Act, 1962 - appellant could not produce any authority letter received from the exporter and, therefore, it cannot be held that appellant was reasonable for confiscation of goods - HELD THAT - The original authority has held that the appellant were liable for penalty under Section 117 of the Customs Act, 1962 and subsequently ordered imposition of penalty of Rs.2.0 lakhs under Section 114(i) of the Customs Act, 1962 and penalty of Rs. 1.0 lakh under Section 117 of the Customs Act, 1962 and the said penalties sustained through Order-in-Appeal. There is no finding recorded by the original authority as to why the original authority had imposed penalty under Section 114(i) of the Customs Act, 1962 in the original order. The original authority without giving any reason why penalty under Section 114(i) of the Customs Act, 1962 is liable to be imposed on the appellant, has imposed the said penalty. The penalty of Rs. 2.0 lakhs imposed on appellant under Section 114(i) of the Customs Act, 1962 is set aside - other part of demand upheld - appeal allowed in part.

Summary

Issues:
1. Imposition of penalties under Sections 114(i) and 117 of the Customs Act, 1962 for contravention of export provisions without proper authorization.

Analysis:
1. The case involved the appellant, a customs clearance business, filing shipping bills on behalf of an exporter without proper authorization. The investigation revealed that drawback claims were allowed without receiving foreign inward remittance against the exported goods. Penalties were imposed under Sections 114(i) and 117 of the Customs Act, 1962. The appellant appealed the Order-in-Original, arguing lack of authority letter from the exporter and absence of evidence showing abetment by the appellant.

2. The appellant contended that penalty under Section 114 is for contravention of Section 113, emphasizing the lack of proof of abetment. On the other hand, the authorized representative highlighted the appellant's failure to verify the exporter's authenticity, a crucial responsibility. The original authority upheld penalties under Sections 114(i) and 117, which were sustained in the Order-in-Appeal.

3. Upon review, the Tribunal found a lack of reasoning in the original order for imposing the penalty under Section 114(i) of the Customs Act, 1962. The absence of justification rendered that part of the Order-in-Original unsustainable. Consequently, the Tribunal set aside the penalty of Rs. 2.0 lakhs imposed under Section 114(i) of the Customs Act, 1962, partially allowing the appeal.

4. The judgment highlighted the importance of proper authorization in customs clearance activities and the responsibility of agents to verify the authenticity of exporters. The Tribunal's decision focused on the necessity of clear reasoning for imposing penalties under specific sections of the Customs Act, ensuring procedural fairness and accountability in enforcement actions.

Conclusion:
The Tribunal's decision clarified the requirements for imposing penalties under different sections of the Customs Act, emphasizing the need for clear justification and evidence in enforcement actions. The case underscored the significance of proper authorization and due diligence in customs clearance operations to prevent unauthorized activities and ensure compliance with export regulations.