2017 (5) TMI 1004 - AT - Customs

Penalty on CHA - though the NOC was filed by CHA but the same was filed after a gap of 37 days which the CHA cannot explain - Held that - such delay in filing NOC cannot be adopted as a ground for imposition of penalty u/s 112(b) of the CA - the fact that appellant did not bring the matter to the Customs about their doubt regarding the consignment also cannot be adopted as a reason for imposition of penalty inasmuch as it was the Customs own alert about the Bill of Entry which created the doubt in mind of the CHA and not vice versa - In the absence of any independent evidence showing any malafide intention on the CHA or his employee, the view that penalty imposed upon them is required to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Non-prosecution of appeal due to lack of interest by one party.
2. Imposition of penalties on a Customs House Agent (CHA) and a G card holder for alleged violations related to import declarations and examination procedures.

Issue 1: Non-prosecution of appeal
The judgment begins with noting the absence of one party, despite admitting guilt and paying duties for illegal imports. The party's lack of interest in pursuing the appeal leads to its dismissal for non-prosecution. This decision is based on the party's previous admission and actions regarding the case.

Issue 2: Imposition of penalties on CHA and G card holder
The judgment details the case involving a CHA firm and a G card holder who filed a Bill of Entry for an importer, which was later found to contain undeclared goods during examination. The adjudicating authority imposed penalties on the CHA and the G card holder for various violations, primarily related to the delay in filing a No Objection Certificate (NOC) and not reporting doubts about the consignment to Customs.

The judgment references legal precedents to analyze the imposition of penalties on CHAs. It highlights that penalties should not be imposed solely based on the CHA's failure to supervise employees or breach of regulations without evidence of awareness of illegal activities. The judgment cites cases where penalties were set aside when CHAs acted based on provided documents and lacked knowledge of illegal activities.

The judgment criticizes the adjudicating authority for not providing reasonable grounds to show that the CHA or the G card holder had knowledge of the contravened goods in the container. It emphasizes that the delay in filing the NOC and not reporting doubts to Customs cannot be valid reasons for penalty imposition. The judgment dismisses the importer's statement, as it lacks independent corroborative evidence and is denied by the G card holder. Ultimately, the penalties imposed on the CHA and the G card holder are set aside, and both appeals are allowed with consequential relief to the appellants.

In conclusion, the judgment addresses the issues of non-prosecution of an appeal and the imposition of penalties on a CHA and a G card holder for violations related to import declarations and examination procedures. It provides a detailed analysis based on legal precedents and the specific circumstances of the case, ultimately setting aside the penalties imposed on the CHA and the G card holder.