2024 (4) TMI 731 - AT - Customs

Penalty under Rule 18 (1) of CBLR 2018 on customs broker - exporter availed undue benefit under Merchandise Exports from India Scheme (MEIS) in the export of safety matches - misclassifying the same under CTH 36050090 as against CTH 36050010 - facilitated the filing of documents relating to export on behalf of their exporter client - violation of Regulations 10(d) 10 (e) ibid - HELD THAT - In the case of M/s. Max Miller Agencies 2024 (1) TMI 1220 - CESTAT CHENNAI this Bench has considered an almost similar issue and after considering several judicial pronouncements has found it proper to delete penalty imposed for violations of regulation in 10 (d) and 10 (e). Thus, I deem it proper to delete the penalty imposed on the appellant and therefore, the impugned order calls for interference. Resultantly, the impugned order is set aside and the appeal is allowed.

Summary

Issues:
The issue in consideration is whether the revenue was justified in imposing a penalty on the appellant under CBLR 18(1) of CBLR 2018.

Details of the Judgment:
The appellant, a Customs Broker, filed an appeal against the Order in Original passed by the Commissioner of Customs, Tuticorin. The appellant was alleged to have facilitated the misclassification of goods by an exporter, resulting in undue benefits under the MEIS scheme. The appellant was accused of violating regulations 10(d) and 10(e) of CBLR 2018. The Original Authority imposed a penalty of Rs.25,000 under regulation 18(1) of CBLR 2018, considering that the appellant did not gain any benefit from the violations. The appellant challenged this penalty through the present appeal.

The appellant's advocate cited a similar case where a penalty imposed on a customs broker was deleted by the Chennai Bench. On the other hand, the Assistant Commissioner relied on another case where a penalty was upheld. The Tribunal analyzed both cases and noted that the penalty in the latter case was under Section 114 of the Customs Act, which was not directly applicable to the present case. The Tribunal referenced the observations made in the case where a penalty was deleted, emphasizing the absence of mens rea on the part of the appellant and the legal principles regarding classification disputes.

Based on the above analysis and legal precedents, the Tribunal concluded that the penalty imposed on the appellant was not sustainable in law due to the lack of mens rea. Therefore, the penalty of Rs.25,000 was set aside, and the appeal of the appellant was allowed. The impugned order was overturned, and the penalty was deleted.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed under CBLR 18(1) of CBLR 2018, based on the absence of mens rea and legal principles governing classification disputes.