2017 (3) TMI 759 - AT - Customs

Imposition of penalty u/s 114(i) and 114(iii) of the CA 1962 on the officers of customs and CHA - exports of garments - misdeaclaration of goods exported - valuation - penalty stands imposed upon SHRI ASHOK KUMAR INDORA INSPECTOR on the ground that he has not done proper examination of the consignment inasmuch as 500 pieces per package were declared whereas 400 pieces of garments per package were found - Held that - the said reasoning cannot be adopted for imposition of penalty in terms of Section 114 of the Act inasmuch as there is nothing on record to show that there was any mensrea on the part of the said appellant so as to abet the illegal export - penalty set aside. Imposition of penalty on SHRI BORIA RAM SUPERINTENDENT on the ground that he has passed the let export order which is not a mere formality but has legal requirement to be fulfilled by the Superintendent diligently and the law places a great responsibility on the officer to ensure that the government revenue is not siphoned by such fraudulent means - Held that - Any lapse in performance of duty can at the most be considered as inefficiency which will not lead to any charge of abetment or connivance thus attracting the penal action - in the absence of any evidence to reflect upon the said appellant s role to play in the alleged misdeclaration penalty set aside. Imposition of penalty on SHRI B.N. GANDHI PROP. CHA FIRM on the ground that he has failed to follow the provisions of CHA Regulations 2013 and they have not adhered to the requirements and thus are guilty of filing the shipping bills in utter disregard to the provisions placed on them by the Regulations - Held that - violation of any of the provisions of the Customs Broker Licensing Regulations 2013 would result in revocation of his license in terms of the said Regulation and in the absence of any evidence to the contrary will not call for any penalty on the CHA - penalty set aside. Penalty set aside - appeal allowed - decided in favor of appellants.

Summary

Issues:
Imposition of penalty under Section 114(i) and 114(iii) of the Customs Act, 1962 on two customs officials and a customs broker firm.

Analysis:
1. Appeal No. C/53004/2016 - SHRI ASHOK KUMAR INDORA, INSPECTOR:
- The penalty was imposed on the Inspector for failing to identify discrepancies in the consignment, leading to misdeclaration and inferior quality goods.
- The Commissioner's reasoning for imposing the penalty was challenged, citing lack of evidence of mens rea or connivance with the exporter.
- The Tribunal agreed that mere lapses or inefficiency do not constitute misconduct under the Customs Act, setting aside the penalty.

2. Appeal No. C/52976/2016 - SHRI BORIA RAM, SUPERINTENDENT:
- The Superintendent was penalized for negligently passing let export orders without proper examination, leading to potential revenue loss.
- The adjudicating authority emphasized the legal responsibility of the Superintendent to prevent revenue loss through fraudulent means.
- The appellant argued that any dereliction of duty should not attract penal action without evidence of connivance, which the Tribunal upheld, setting aside the penalty.

3. Appeal No. C/53007/2016 - SHRI B.N. GANDHI PROP. CHA FIRM:
- The Customs Broker was penalized for not obtaining proper authorization from exporters and failing to follow CHA Regulations.
- The Commissioner's findings were disputed, highlighting compliance with 'Know Your Customer' norms and availability of exporter details.
- The Tribunal noted that violation of CHA Regulations could lead to license revocation but not necessarily to penalty, citing precedents where penalties were set aside.
- The penalty on the CHA firm was deemed unjustified and set aside based on the lack of evidence supporting the charge.

In conclusion, all three appeals were allowed, and penalties imposed on the customs officials and the customs broker firm were set aside due to insufficient evidence of wrongdoing or failure to establish culpability in the alleged offenses.