2015 (3) TMI 467 - AT - Customs

Imposition of penalty on CHA - whether the appellant had played an active role and abetted in misdeclaration of elastic tapes imported by a client of his which was found to have been misdeclared as non-woven fabrics - Held that - There is no positive finding against the appellant. In fact even in the show-cause notice, in paragraph 33, where penalty proposal on the appellant is discussed but it is seen that after briefly explaining the facts, a conclusion has been reached in the middle of the paragraph that the appellant was well aware about the presence of elastic tapes in the consignments before importation of the same. Further on going through the paragraph, we find that no such evidence is forthcoming in the whole paragraph. There is no justification for imposition of penalty on the appellant and accordingly penalty is set aside - Decided in favour of assessee.

Summary

Issues: Penalty imposition on the appellant for alleged involvement in misdeclaration of imported goods.

Analysis:
1. The primary issue in this case revolves around the imposition of a penalty of Rs. 10,000 on the appellant, a Customs House Agent (CHA), for his alleged role in abetting the misdeclaration of elastic tapes as non-woven fabrics by a client. The Commissioner found that 150 cartons of elastic tapes were cleared without declaration at the time of clearance, indicating a discrepancy in the Bill of Lading. The Commissioner concluded that the appellant was aware of the modus operandi used for illegal importation of goods, based on various pieces of evidence presented.

2. The appellant's counsel argued that a previous case involving the appellant did not result in any penalty being imposed, citing a specific Order-In-Original (OIO) from 2006 where the Commissioner had given the benefit of the doubt to the appellant and dropped penal action. The OIO highlighted that there was no concrete evidence to prove deliberate connivance between the appellant and the importer, thus absolving the appellant of liability.

3. Upon careful examination of the records and both orders, the tribunal concurred with the appellant's counsel's submissions. It was noted that there was no definitive finding against the appellant, and even in the show-cause notice, the evidence supporting the appellant's alleged awareness of the misdeclaration was found to be lacking. The tribunal observed that the conclusion drawn in the notice did not align with the actual evidence presented, leading to doubts about the justification for penalizing the appellant.

4. Consequently, after thorough review and analysis, the tribunal concluded that there was insufficient justification for imposing the penalty of Rs. 10,000 on the appellant. The penalty was set aside, providing the appellant with consequential relief. The tribunal's decision was based on the lack of concrete evidence linking the appellant to the misdeclaration of goods, thereby overturning the initial penalty imposed on the appellant.

This detailed analysis of the judgment highlights the key legal arguments, evidentiary considerations, and the tribunal's reasoning behind overturning the penalty imposed on the appellant in the case involving the misdeclaration of imported goods.