2023 (11) TMI 114 - AT - Customs

Levy of Additional Customs Duty - misclassification and misdeclaration of import the value of -Vessel Pride of Goa - levy of penalty under Section 112 (a) of the Customs Act, 1962 - HELD THAT - The main charges against the importer and its director has already been dropped by this Tribunal vide its order in case of SHRI ASHOK KHETRAPAL, M/S GOA COASTAL RESORTS RECREATION PVT. LTD. VERSUS CC JAMNAGAR 2014 (4) TMI 421 - CESTAT AHMEDABAD wherein, it has been held classification of POG and its assessments have been correctly made and it is held that any value addition will not have effect on duty when the vessel of CTH 8901 imported by the appellant stood exempted under an exemption notification. Since the issue has already been decided in favour of the importer and his director as mentioned above since the cause of imposing penalty against the present appellant does not exist anymore and therefore the Order-In-Original is set aside. Appeal allowed.

Summary

Issues Involved:
1. Misclassification and misdeclaration of the imported vessel's value.
2. Imposition of penalty on the Customs House Agent (CHA) under Section 112(a) of the Customs Act, 1962.

Summary:

1. Misclassification and Misdeclaration of the Imported Vessel's Value:
The appellants, acting as Customs House Agents (CHA) for the importers of the vessel "Pride of Goa," were accused of misclassification and misdeclaration of the vessel's value. The department issued a show cause notice demanding additional customs duty under Section 28(4) of the Customs Act, 1962, alleging that the value was misdeclared and needed to be re-determined as per Section 14 of the Customs Act, 1962. The Tribunal had previously adjudicated similar charges against the importing firm and its director, dropping the misclassification charges, as detailed in the case of Ashok Khetrapal vs CC Jamnagar.

2. Imposition of Penalty on the Customs House Agent (CHA):
The adjudicating authority imposed a penalty of Rs. 5,00,000/- on the appellant under Section 112(a) of the Customs Act, 1962. The appellants contested this penalty, arguing that since the main charges against the importing firm and its director were dismissed, the penalty against the CHA should also be extinguished. The Tribunal agreed, noting that the primary charges had been resolved in favor of the importer, thus nullifying the basis for penalizing the CHA. Consequently, the Tribunal set aside the Order-In-Original imposing the penalty on the appellant.

Conclusion:
The appeal was allowed, and the penalty imposed on the Customs House Agent was set aside, as the core issue of misclassification and misdeclaration had already been resolved in favor of the importer and its director. The judgment emphasized that the cause for imposing the penalty no longer existed.

(Pronounced in the open court on 31.10.2023)