2003 (12) TMI 124 - AT - Central Excise

Imposition of penalty - Customs House Agent - smuggling sandalwood while attempting to export it as roof tiles - appellant appended his signature on the documents without verification - HELD THAT -There was no allegation that appellant had knowledge and he had abetted in the committal of the offence. The penalty has also been imposed solely on the ground that appellant had appended his signature in various documents without due verification of the contents of the goods which was later found to be other than what was declared in violation of provisions of Customs Act. The Tribunal judgment which has been referred to by the Counsel that some degree of knowledge of contravention of law on the part of the abettor must be shown for imposition of penalty u/s 112 of Customs Act as held in the case of Liladhar Pasoo Forwarders Pvt. Ltd. v. CC, Mumbai 2000 (8) TMI 156 - CEGAT, MUMBAI also would apply to the facts of the case. The Tribunal also likewise held in the case of Shaikh Pandit v. CC, Calcutta 2000 (10) TMI 511 - CEGAT, KOLKATA that penalty u/s 114 cannot be imposed on CHA who is in pursuance of Regulation 10(2)(b) of CHALR'84 merely assisted in storing goods and rendering services required under aforesaid Regulation, thereby concluding that, in the absence of any evidence on record it cannot be suggested that agent played any active role in attempting to export prohibited goods. This judgment also applies to the facts of the case. The case law cited by the Counsel in the case of Syndicate Shipping Services Pvt. Ltd. v. CC, Chennai 2003 (3) TMI 158 - CEGAT, CHENNAI on identical facts also applies to the present case. This Bench in the aforesaid case clearly noted that no positive evidence on record had been produced to show any mala fide intention on the part of CHA or that he was an accomplice or abettor and, therefore, held that penalty was not imposable. Same view has been expressed by the Calcutta Bench in the case of Jha Shipping Agency v. CC (Port) Calcutta 2000 (9) TMI 199 - CEGAT, KOLKATA . Thus, the appellants, which are on identical score, the penalty of Rs. 5 lakhs on the appellant is required to be set aside by allowing the appeal and we order accordingly.

Summary

Issues involved: Imposition of penalty on a Customs House Agent (CHA) for alleged involvement in smuggling sandalwood while attempting to export it as roof tiles.

Summary:
1. The appeal arose from an Order-in-Original imposing a penalty of Rs. 5 lakhs on the CHA for his alleged involvement in smuggling sandalwood. The CHA claimed innocence, stating he signed documents without knowledge of the concealed goods. The Commissioner imposed the penalty based on the CHA's signature on documents without verifying the contents, citing his past involvement in a similar case.

2. The CHA's counsel argued that penalty cannot be imposed unless the CHA had knowledge of the contravention of law. Citing precedents, it was emphasized that mere signature on documents without verification does not prove guilt. The Tribunal's past judgments highlighted the importance of proving the CHA's active involvement or knowledge in smuggling activities for penalty imposition.

3. Relying on previous rulings, the CHA's counsel contended that similar cases had resulted in penalties being set aside due to lack of evidence showing the CHA's complicity or mala fide intention. The judgments emphasized the need for concrete proof of the CHA's active role in attempting to export prohibited goods for penalty imposition.

4. The Departmental Representative argued that the CHA's signature on documents without verifying the contents, leading to the discovery of prohibited goods, warranted the penalty imposition. However, no contradictory judgments were presented to counter the cited precedents.

5. After careful consideration, the Tribunal found that the penalty was solely based on the CHA's signature without evidence of his knowledge or active involvement in the smuggling. Citing relevant case laws, the Tribunal concluded that the penalty of Rs. 5 lakhs on the CHA should be set aside, aligning with previous judgments where penalties were overturned due to lack of concrete evidence implicating the CHA.