2024 (4) TMI 180 - AT - Customs

Levy of penalty on Customs Broker - Accepting documents without proper authorization - The Department argued that this constituted abetment of the export of prohibited goods. - Smuggling - Pseudoephedrine and Ketamine Hydrocholoride - concealment of prohibited drugs in cartons containing Pomegranate fruits - violation of the provisions under CHALR / CBLR Regulations - violation of provisions of Customs Brokers Licensing Regulations - HELD THAT - On perusal of the impugned order the original authority has recorded findings for imposing penalty on appellant viz. G. Seenivasan who is the CHA. It has been categorically stated by the adjudicating authority that there is no evidence to show that the appellant G. Seenivasan had knowledge that the cartons contained prohibited items. Thus it can be seen that the investigation has not brought out that appellant Sri G. Seenivasan had any knowledge about the attempt to export the contraband items. In such circumstances the penalty imposed u/s 114 (i) of the Customs Act 1962 is not justified. Violation of provisions of Customs Brokers Licensing Regulations - The proceedings having been initiated under CBLR Regulations for revoking the license and the license having already been revoked I am of the view that the penalty imposed u/s 114 (i) of the Customs Act 1962 is not legal and proper and harsh on the appellant. Penalty imposed on the appellant - The penalty of Rs.50, 000/- has been imposed by the Department on Shri S. Murugaram. Since it is clearly brought out that Sri S. Murugaram had no knowledge that contraband items were concealed in the cartons I find that the penalty of Rs.50, 000/- imposed on him is liable to be set aside. Thus the impugned order to the extent of imposing penalty on the appellant viz. G.Seenivasan and Rs.50, 000/- on the appellant viz. S. Murugaram u/s 114 (i) of the Customs Act 1962 is to be set aside. The appeals are allowed with consequential relief if any.

Summary

Issues involved: Attempted export of contraband goods concealed in cartons, imposition of penalties u/s 114(i) of Customs Act, 1962 on appellants

The judgment of the Appellate Tribunal CESTAT CHENNAI dealt with two appeals arising from a common impugned order regarding the attempted export of contraband goods concealed in cartons and the imposition of penalties under Section 114(i) of the Customs Act, 1962 on the appellants.

Attempted Export of Contraband Goods:
The Customs Intelligence Officers were informed about suspected contraband concealed in cardboard cartons of pomegranate fruits. Upon examination, it was found that 60 cartons contained white crystalline powder identified as Pseudoephedrine and Ketamine Hydrochloride. Investigations revealed that the cartons were handed over by Shri V. Radhakrishnan to Sri S. Murugaram, who filed the export documents. The original exporter, M/s.A.M. Exporters, had no knowledge of the export. The appellants were alleged to have abetted in the export of prohibited goods.

Imposition of Penalties:
The original authority imposed a penalty of Rs.1 lakh on G. Seenivasan and Rs.50,000 on S. Murugaram under Section 114(i) of the Customs Act, 1962 for their alleged involvement in the attempted export. The appellants contended that they had no knowledge of the contraband and had not violated any regulations. They argued that the penalties were unjustified and should be set aside.

Decision and Reasoning:
The Tribunal found that there was no evidence to show that G. Seenivasan had knowledge of the prohibited items in the cartons. The penalty imposed on him was deemed unjustified and not legal, especially considering the revocation of his license under Customs Brokers Licensing Regulations. Similarly, S. Murugaram had no knowledge of the contraband and had only accepted the cartons based on false information provided by Shri V. Radhakrishnan. The penalty of Rs.50,000 imposed on him was set aside. The Tribunal cited precedents where penalties were set aside due to lack of evidence of active involvement or knowledge of the illegal activities.

In conclusion, the Tribunal allowed the appeals, setting aside the penalties imposed on G. Seenivasan and S. Murugaram under Section 114(i) of the Customs Act, 1962.