2009 (11) TMI 518 - AT - Customs

Penalty on CHA - changed the sample and forwarded to Textile Committee for monetary consideration from the importer - not being known of the fact of the change of the sample and the appellant cannot held liable for penal action - appellant was mere an employee, who was working under the instruction of the CHA firm Held that - absence of any knowledge and holding that penal action cannot be taken against the CHA firm, penalty against the appellant is also not sustainable - Accordingly, the appeal is allowed with consequential relief.

Summary

Issues:
Imposition of penalty under Section 112(a) of the Customs Act, 1962 for mis-declaration of goods.

Analysis:
The appellant filed an appeal against a penalty of Rs. 25,000 imposed under Section 112(a) of the Customs Act, 1962. The case involved mis-declaration of goods where "Polyester Fabrics" were declared but found to be "Plain Polyester Dyed Woven Fabrics" meant for embroidery. The appellant, an employee of a Customs House Agent (CHA) firm, claimed innocence stating that he handled documentation and customs clearance as instructed by another employee, Shri Hotkar. Despite being contacted by M/s. Prime Textiles through Shri Hotkar for multiple consignments, the appellant denied knowledge of sample changes or mis-declarations. The Commissioner (Appeals) upheld the penalty, leading to the appellant's appeal before the tribunal.

The tribunal noted that the appellant's statements under Section 108 of the Customs Act revealed his limited role in handling documentation based on information provided by parties. It was established that the appellant was not involved in drawing samples and was unaware of any sample changes. Additionally, Shri Hotkar admitted to changing samples for monetary gain without the appellant's knowledge. The tribunal emphasized that the appellant, as an employee of the CHA firm, acted under instructions and was not responsible for the mis-declaration. Notably, no penalty was imposed on the CHA firm itself, indicating the appellant's lack of culpability. Therefore, the tribunal concluded that penal action against the appellant was unjustified due to his lack of involvement and knowledge in the mis-declaration scheme.

In conclusion, the tribunal allowed the appeal, providing consequential relief to the appellant. The judgment highlighted the appellant's innocence in the mis-declaration of goods, attributing the wrongdoing to another employee without the appellant's knowledge. The decision underscored the importance of individual culpability and knowledge in imposing penalties under the Customs Act, absolving the appellant of any wrongdoing in the mis-declaration case.