2024 (4) TMI 732 - AT - Customs

Penalty imposed on the appellant being the employee of the Shipping Line u/s 114AA - manipulation in the document - statement recorded u/s 108, wrongly stated that the supplier of the goods in the subject container was Jubilee Middle East General Trading LLC, Dubai - HELD THAT - From the RUDs placed on record by the learned AR, we find the Bill of Lading dated 6.11.2014 the supplier has been mentioned as M/s. Jubilee Middle East General Trading LLC Dubai, UAE. Therefore, the appellant is not wrong in saying that the shipper/supplier is M/s. Jubilee Middle East General Trading LLC. Hence, no fault can be attributed on the appellant. The provisions of section 114 AA provides for imposition of penalty on a person who knowingly or intentionally make, sign, uses or causes to be made any declaration, statement or documents, which is false or incorrect in any material particular in the transaction of any business for the purpose of the Act. From the statement of Shri Ravinder Singh, we find that the manipulation in the documents were done by the Dubai Branch of the shipping line at the behest of the actual supplier. There is no evidence to link the appellant with the said manipulation done at Dubai office. The shipping line has not been roped in the present proceedings. The revenue has not substantiated the charge of connivance of the appellant with the illegal import rather he was instrumental in ascertaining the correct valuation of the impugned goods. We, therefore, do not find any justification for imposition of penalty u/s 114AA of the Act. The consistent stand taken in the judicial pronouncements is that no penalty can be imposed on the employee, who acts under the instructions of his employer unless and until there is proof of fraud having been committed by him. We are, therefore of the view that no penalty can be imposed on the appellant who was working as an employee being the Operation Manager with the Shipping Line and on the basis of the Bill of Lading made the statement that the supplier was M/s. Jubilee Middle East General Trading LLC, Dubai and the manipulation in the document was at the Dubai office of the shipping line stands proved by the statement of Shri Ravinder Singh, the present employee of the shipping line. The impugned order deserves to be set aside and the appeal needs to be allowed. Accordingly, the appeal stands allowed.

Summary

Issues Involved:
1. Sustainability of penalty imposed u/s 114AA of the Customs Act, 1962 on the appellant.
2. Applicability of Section 114AA in the context of the appellant's actions.
3. Consideration of the appellant's role as an employee acting under employer's instructions.

Summary:

1. Sustainability of Penalty u/s 114AA:
The appellant challenged the order-in-appeal affirming the penalty u/s 114AA of the Customs Act, 1962. The penalty was imposed based on the appellant's statement made u/s 108 of the Act, which allegedly contained false information regarding the supplier of the goods.

2. Applicability of Section 114AA:
The appellant argued that the statement was made based on documents provided by the shipping line's office and under the instructions of the employer. The provisions of Section 114AA were intended to punish those who availed export benefits without actual exports, which was not the case here. The Tribunal noted that the manipulation in documents was done by the Dubai branch of the shipping line at the behest of the actual supplier, with no evidence linking the appellant to the manipulation.

3. Employee Acting Under Instructions:
The Tribunal referenced several judicial pronouncements establishing that penalties cannot be imposed on employees acting under employer instructions unless there is proof of fraud committed by the employee. The appellant, as an Operation Manager, made the statement based on the Bill of Lading provided by the employer, and there was no evidence of personal benefit or fraud by the appellant.

Conclusion:
The Tribunal found no justification for the imposition of penalty u/s 114AA on the appellant, as the manipulation was done by the Dubai office and the appellant acted under employer instructions. The appeal was allowed, and the impugned order was set aside.

Order Pronounced:
The appeal stands allowed, and the order was pronounced in open court on 18th April, 2024.