2002 (10) TMI 107 - HC - Customs

Summary

Issues:
Whether Customs Authorities can levy penalty on local agents in India under Section 112(a) of the Customs Act, 1962 for breach of Bills of Lading Act, 1855 by the principal in a foreign country.

Detailed Analysis:

Issue 1: Customs Authorities' Jurisdiction and Penalty Imposition
The Customs Authorities levied a penalty on local agents in Mumbai for alleged breach of Bills of Lading Act, 1855 by the principal in Taiwan. The Additional Collector of Customs imposed a penalty of Rs. 30,000 on the agents, holding them liable for the principal's actions. The petitioners challenged this penalty, arguing that the Customs Act does not cover matters related to Bills of Lading and that they cannot be penalized for actions outside India. The court noted that the Revenue did not allege any illegality by the petitioners and that they were not involved in any offense under the Customs Act. The court emphasized that penalizing the agents for the principal's actions was unjustified under Section 112(a) of the Customs Act.

Issue 2: Application of Section 148 of the Customs Act
The court analyzed Section 148 of the Customs Act, which holds agents liable for obligations imposed on the conveyance's incharge. It was established that the petitioners were not agents appointed by the carrier of the vessel, and as such, Section 148 could not be invoked against them. The court clarified that the agent's liability under this section is limited to obligations under the Customs Act, not other Acts. Since there was no breach by the carrier of the vessel, penalizing the agents under Section 148 was deemed unjustified.

Issue 3: Clearance Procedures and Evidence
The court highlighted that for goods clearance, the importer must submit the Bill of Entry along with the carrier's Bill of Lading, not the one issued by the freight forwarders. The agents' employees confirmed that the relevant column in the Bill of Lading issued by the principal was left blank, indicating no antedating. The court found no evidence against the principal for antedating the Bill of Lading. Consequently, penalizing the agents for the principal's alleged actions was deemed unwarranted under both the Customs Act and the Bills of Lading Act.

In conclusion, the court quashed the order imposing the penalty on the agents, directing the return of the Bank guarantee or cash deposit. The judgment emphasized the lack of evidence supporting the penalty imposition on the local agents, thereby ruling in favor of the petitioners and rejecting the Customs Authorities' justification for penal action.