2023 (9) TMI 1266 - AT - Customs

Levy of penalty u/s 114(i) and 114(aa) of Customs Act, 1962 - smuggling of Red Sanders - diversion of duty free imported materials - receive and sell some of the diverted duty free materials without any document, in cash. Levy of penalty on M/s. Krishna Shipping Agency, CHA - HELD THAT - As the appellant has already been excluded from taking any action under section CHALR, 2004, therefore, we also refrain from imposing penalty on the appellant. Accordingly, penalty imposed on the appellant M/s. Krishna Shipping Agency, CHA is set aside. Levy of penalty on M/s. Krishna Shipping Transport Agency - abetting in smuggling of red sanders - HELD THAT - The appellant is transporter and he has deputed his driver for the work of loading of the container from the premises of the exporter. It is a fact that the driver was negligent at the time of loading of the goods in the container and he made a bald statement that he has gone for refreshment with some unknown person. It is very strange that how can a driver go for refreshment with an unknown person, therefore, it is a case of complete negligence on the part of the driver and for the act of the driver, the appellant is liable to be penalized, therefore, the appellant is liable for penal action under section 114(i) of the Customs Act, 1962 for the alleged act of abetting the smuggling of Red Sanders logs outside India. Accordingly, penalty of Rs.8.00 Lakhs is confirmed against the appellant namely M/s. Krishna Shipping Transport Agency. Levy of penalty on Shri Srikant Taparia - HELD THAT - Shri Srikant Taparia was handling the export consignment of the exporter and also paying the expenses on account of export of the consignment on behalf of the exporter, which clearly shows that Shri Srikant Taparia was having hand in glove with the exporter and was actively engaged in the activity of smuggling of Red Sanders logs outside India with the help of the exporter. Therefore, no leniency is required to be taken on Shri Srikant Taparia. Therefore, penalty of Rs.2.00 Lakh imposed on Shri Srikant Taparia, is confirmed. Levy of penalty on Shri Ajay Kumar Ghosh - HELD THAT - Shri Ajay Kumar Ghosh was assigned the duty of looking after the loading of the export consignment at the premises of the EOU which he clearly ignored and as per him he has deputed Shri Asit Kumar Bandyopadhyay to oversee the loading of export consignment in the container. But he was required to sign ARE-1 and ARE-1 is to be signed and sealed altogether, so without counter-sign of Shri Asit Kumar Bandyopadhyay and with the signature of Shri Ajay Kumar Ghosh, who was not present at the site when the loading took place, the container was sealed - defence taken by Shri Ajay Kumar Ghosh is beyond doubt that he was actively involved in the loading of Red Sanders in the container. Therefore, the observation of the adjudicating authority in the impugned order are not acceptable. Accordingly, penalty of Rs.2.00 Lakhs imposed on Shri Ajay Kumar Ghosh. Appeal allowed in part.

Summary

Issues involved:
1. Imposition of penalties on appellants under section 114(i) and 114(aa) of the Customs Act, 1962.
2. Appeal by Revenue against exoneration of Shri Ajay Kumar Ghosh, Superintendent of Central Excise.

Summary:

1. M/s. Krishna Shipping Agency, CHA:
The Tribunal examined the allegation that M/s. Krishna Shipping Agency violated the provisions of the Custom House Agents Licensing Regulations, 2004 (CHALR). The proceedings under CHALR were previously dropped by the Tribunal in 2017, where it was determined that the appellant had taken reasonable steps to comply with Regulations 13(a), (d), and (o) of CHALR. Consequently, the Tribunal refrained from imposing any penalty on M/s. Krishna Shipping Agency, CHA, and set aside the penalty imposed.

2. M/s. Krishna Shipping Transport Agency:
The Tribunal found that the appellant, a transporter, was liable for penal action under section 114(i) of the Customs Act, 1962, due to the negligence of its driver during the loading of the container. The driver's claim of going for refreshment with an unknown person was deemed implausible. Therefore, the penalty of Rs.8.00 Lakhs imposed on M/s. Krishna Shipping Transport Agency was confirmed.

3. Shri Srikant Taparia:
The Tribunal held that Shri Srikant Taparia was actively engaged in the smuggling activities by handling export consignments and paying expenses on behalf of the exporter. This involvement indicated his complicity in the illegal export of Red Sanders logs. Consequently, the penalty of Rs.2.00 Lakhs imposed on Shri Srikant Taparia was confirmed.

4. Shri Ajay Kumar Ghosh:
The Tribunal found that Shri Ajay Kumar Ghosh, who was responsible for overseeing the loading of the export consignment, failed to perform his duties and improperly delegated the task to a subordinate without proper oversight. The Tribunal rejected the defense provided by Shri Ghosh and imposed a penalty of Rs.2.00 Lakhs, overturning the adjudicating authority's decision to exonerate him.

Conclusion:
The appeals filed by the Revenue and M/s. Krishna Shipping Agency, CHA were allowed, while the appeals by M/s. Krishna Shipping Transport Agency and Shri Srikant Taparia were dismissed. The penalties on M/s. Krishna Shipping Transport Agency, Shri Srikant Taparia, and Shri Ajay Kumar Ghosh were confirmed.