2005 (10) TMI 143 - AT - Customs

Summary

Issues:
1. Imposition of penalty under Section 114 of the Customs Act on a Custom House Agent (CHA) for involvement in the overvaluation of goods for export.

Analysis:
The appellant, a CHA, filed an appeal against the penalty imposed under Section 114 of the Customs Act for his alleged involvement in a conspiracy to overvalue goods for export. The adjudicating authority found the appellant to be part of a scheme to export goods at an inflated value to obtain a higher drawback amount. The appellant contended that he acted as per the instructions of the exporter, Shri Rajan Arora, and had no role in misdeclaring the goods. He claimed to have immediately informed the exporter when discrepancies were discovered during examination. The appellant argued that he only received a nominal fee of Rs. 2500 for his services and had no share in the drawback claim. The Customs authorities conducted a thorough investigation and found Shri Rajan Arora available at the given address, supporting the appellant's claim of innocence.

The Revenue contended that the appellant, being a CHA, was duty-bound to verify the contents of the consignment and ensure compliance with declarations. They argued that the appellant and the exporter colluded to inflate the value of goods to obtain a higher drawback, justifying the imposition of the penalty under Section 114 of the Customs Act. However, the appellant maintained that he merely followed the instructions of the exporter and had no knowledge or intention to deceive authorities.

The adjudicating authority concluded that the appellant was part of a conspiracy with the exporter to obtain a higher drawback by overvaluing goods. Despite the appellant's involvement in filing the shipping bill as per the exporter's instructions, there was no evidence to suggest his active participation in the conspiracy. The appellant's limited role as a CHA, his immediate disclosure of discrepancies, and the lack of personal gain from the scheme led to the setting aside of the penalty imposed under Section 114. The appeal was allowed based on the absence of concrete evidence linking the appellant to the conspiracy for overvaluation of goods for export.