2022 (9) TMI 756 - AT - Customs

Levy of penalty u/s 114(iii) of the Customs Act, 1962 - Penalty on CHA - export without Let Export Order - intentional order or not - HELD THAT - The penalties are provided under the CHA Licencing Regulation in case of violation of the obligations by the Customs Broker as contemplated in para 10 of the said Regulation. CHA Licencing Regulation is an offshoot of the Customs Act and Customs Act is broad enough to encompass all kinds of violations. Further Section 114 starts with the word any person and there is no non-obstinate clause in the Customs Broker Licencing Regulation at para 10 to exclude application of the Customs Act. There is all along denial on the part of the offenders concerning their involvement in the alleged act but in the present case the concern clerk himself had admitted his mistake and sought for a lenient view in the matter. As per Section 58 of the Indian Evidence Act facts admitted by the parties or their agents are not required to be proved in any proceedings - thus, for act of the employee direct responsibility is fixed on the Customs broker for which the findings of the Tribunal at Bangalore in the case of AS GOPINATH VERSUS COMMISSIONER OF CUSTOMS, COCHIN 2006 (12) TMI 386 - CESTAT, BANGALORE cannot help the Appellant in getting the desired remedy. The order passed by the Commissioner of Customs (Appeals), Mumbai, Zone-III in imposing penalty under Section 114(1) of the Customs Act for Rs.50,000/- on the Appellant CHA is hereby confirmed - Appeal dismissed.

Summary

Issues:
Confirmation of penalty reduction under Section 114(iii) of the Customs Act from Rs. 2,00,000 to Rs. 50,000 on the Appellant is challenged.

Analysis:
1. The appeal challenges the reduction of penalty imposed on the Appellant under Section 114(iii) of the Customs Act from Rs. 2,00,000 to Rs. 50,000 by the Commissioner (Appeals). The case involves the filing of two manual shipping bills by the Appellant as a Customs House Agent (CHA) for a company at SEZ, Panvel. The goods were handled for export without proper examination and endorsement, leading to penalties imposed on the Appellant and the Ground Handling Agency (GHA) by the Assistant Commissioner of Customs.

2. The Appellant's Counsel argued that the Appellant's fault was not informing Customs Authorities and failing to stop loading after informing the GHA. Citing various case laws, the Counsel contended that penalties under CHA License Regulation should apply instead of Section 114(iii) of the Customs Act. The Respondent's Representative argued that intention is immaterial for penalty imposition and pointed out discrepancies in the Appellant's statements and actions.

3. The Member (Judicial) analyzed the arguments and case laws cited. It was noted that penalties under CHA License Regulation differ from those under the Customs Act. The judgment of the Hon'ble Madras High Court was considered, emphasizing that the Customs Act encompasses various violations, unlike the CHA License Regulation. The Member highlighted that parallel proceedings can occur under different laws without violating constitutional provisions.

4. The Member further discussed the admission of guilt by the Appellant's employee and the responsibility of the Customs broker for employee actions as per the CHA Licensing Regulation. The Member differentiated this case from precedents where denial of involvement was common, emphasizing the direct responsibility of the Customs broker for employee acts. The Tribunal dismissed the appeal, confirming the penalty reduction under Section 114(1) of the Customs Act to Rs. 50,000 imposed on the Appellant CHA by the Commissioner of Customs (Appeals).

This detailed analysis covers the issues, arguments presented, relevant case laws cited, and the final decision of the Appellate Tribunal CESTAT MUMBAI regarding the penalty reduction under the Customs Act for the Appellant.