2001 (10) TMI 139 - AT - Customs

Summary

Issues:
The issues involved in this case are the imposition of a penalty on the Customs House Agent (CHA) under Section 114 of the Customs Act for alleged involvement in over-invoicing of goods under the DEPB Scheme, contravention of CHA Licensing Regulations, and violation of Section 11(i) of the Foreign Trade (Development and Regulations) Act, 1992.

Imposition of Penalty under Section 114 of the Customs Act:
The Commissioner of Customs imposed a penalty of Rs. 50,000 on the CHA for allegedly aiding the exporter in overvaluing goods for higher DEPB credit. The CHA denied these allegations, arguing that there was no evidence to support the contravention of CHA regulations or Section 11(i) of the 1992 Act. The CHA contended that Section 114 could only be invoked if their actions rendered the goods liable to confiscation, which was not the case here. The CHA maintained that they acted in accordance with the exporter's instructions and did not contravene any laws. The Tribunal found that the allegations against the CHA were unsubstantiated, as there was no evidence of any omission or commission by the CHA leading to confiscation of the goods. The Tribunal, therefore, set aside the penalty imposed under Section 114.

Contravention of CHA Licensing Regulations and Section 11(i) of the 1992 Act:
The show-cause notice alleged that the CHA violated Regulation No. 14(b) of the CHA Licensing Regulations and Section 11(i) of the 1992 Act. However, the Tribunal found that Regulation No. 14(b) was erroneously invoked, as there was no evidence that the CHA transacted business in a manner contrary to the regulations. Additionally, Section 11(i) of the 1992 Act applies to importers and exporters, not CHAs. The Tribunal noted that the CHA acted as per the exporter's instructions and there was no evidence to suggest otherwise. The Tribunal concluded that the allegations of contravention of these regulations were not substantiated, leading to the setting aside of the penalty imposed on the CHA.

Conclusion:
In conclusion, the Tribunal found no merit in the allegations against the CHA regarding over-invoicing, contravention of regulations, or violation of the 1992 Act. The Tribunal set aside the penalty imposed under Section 114 of the Customs Act, as there was no evidence to support the claim that the CHA's actions rendered the goods liable to confiscation. The Tribunal emphasized that the CHA acted in accordance with the exporter's instructions and did not contravene any laws, leading to the allowance of the appeal.