2025 (2) TMI 966 - HC - Customs

Levy of penalty under Section 117 of the Customs Act 1962 - no evidence of forgery by the appellant - vicarious liability of the appellant - HELD THAT - The finding of the tribunal sustaining the penalty cannot be sustained. By Annexure-C order the appeal preferred by the employees against the imposition of penalty on the ground of forgery stands allowed and the order of imposition of penalty has been set aside. It is also brought to notice that by Annexure-D the report filed by the Investigating Officer before the Judicial First Class Magistrate Court-I Kochi in Crime No. 1635/2018 of Harbour Police Station the appellant has been exonerated from the crime. A perusal of the order impugned reveals that while the tribunal has found that there are no reasons to sustain the allegations in the show cause notice and thereby interfered with the order of cancellation of the license it has not assigned any reason for nevertheless sustaining the penalty under Section 117 of the Customs Act. Moreover when the employees against whom the allegations of forgery were made have been exonerated and the penalty imposed against them has been set aside we find no reason to sustain the findings of the tribunal that penalise the appellant. The order of the tribunal sustaining the penalty under Section 117 of the Customs Act cannot be sustained - Appeal allowed.

Summary

The Kerala High Court, in a Customs Appeal case, overturned the order of the Customs, Excise and Service Tax Appellate Tribunal that imposed a penalty on the appellant. The tribunal found no evidence of forgery by the appellant but still upheld the penalty. The High Court noted that the employees accused of forgery were exonerated, and there was no justification for penalizing the appellant. Consequently, the High Court set aside the penalty under Section 117 of the Customs Act, ruling in favor of the appellant and allowing the appeal. No costs were awarded.