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TMI Blog2007 (5) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... alty for negligence - appeal allowed - decided in favor of appellant. - C/284 & 285/04/MAS - 598 & 599/2007 - Dated:- 18-5-2007 - Shri P. Karthikeyan, J. REPRESENTED BY : Shri S. Murugappan, Advocate, for the Appellant. Shri V. Seshagiri Rao, SDR, for the Respondent. [Order]. The captioned appeals were filed by M/s. Neptune s Cargo Movers Private Limited (hereinafter NEPTUNE ) and Shri M.M. Parthasarathy, Manager NEPTUNE respectively. The appeals challenge penalties of respectively Rs. 2 lakhs and Rs. 1 lakh imposed on them in the Order-in-Original No. 3754/2005, dated 20-4-2005. In the impugned order the Commissioner of Customs (Exports), Chennai had adjudicated a Show Cause Notice issued to confiscate seized red san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per preconceived plan leaving some bags of popcorn maize in each container. Shri G. Natarajan was found to have embarked on this novel enterprise at the instance of one Shri Ramakrishna, a friend of Shri G. Natarajan assisted by one Shri Bhaskar. 2. As regards the appellants role in the transaction the evidence gathered in the nature of statements recorded from the partners of NEPTUNE, Shri Murali babu and Shri S. Somesan, and its Manager, Shri. M.M. Parthasarathy showed that Shri M.M. Parthasarathy had canvassed documents for the subject exports and paid Rs. 300/- to Shri Muralibabu and Shri S. Somesan for getting their signatures on the documents. The appellants apparently had not taken due precaution and care expected of a CHA inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mumbai [2004 (164) E.L.T. 477 (Tri.-Mum)] - Where no malfeasance, nonfeasance or misfeasance established on part of CHA in handling baggage clearance, penalty under Section 112 of Customs Act, 1962 is not leviable. Adjudicating the Show Cause Notice, the Commissioner confiscated the seized goods and imposed different amounts of penalties on various noticees including the appellants. The red sanderwood logs had been confiscated under Section 113 (d), (e) and (h) of the Customs Act and penalties imposed under Section 114 (i) of the Act. As regards the appellants involvement in the transactions inviting penalties on them, the Commissioner had found as follows :- I find that the case can be distinguished inasmuch as the acts of the CHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Natarajan who was found to be the person responsible for the aborted illicit export had not implicated the appellants, the CHA and Shri M.M. Parthasarathy. Appellants argued to the effect that once the goods were cleared by the Customs after examination the appellants could not be held liable for subsequent substitution of cargo. 4. As per the Law Lexicon, to constitute and aider or abettor, some active steps had to be taken, by word or action, with intent to instigate the principal or principals. Encouragement did not, of necessity, amount to aid and abet. They extracted the adjudicating authority s findings about the persons who had apparently conceived the modus operandi and attempted to smuggle out the prohibited goods by misusing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants had been knowingly involved in the attempt to export the sanderwood logs. The CHA or their Manager, the appellant Shri M.M. Parthasarathy being negligent, facilitated the attempt to unauthorisedly export the prohibited goods cannot be held to have been substantiated in the impugned order. Section 114(i) of the Customs Act does not contemplate penalty for negligence. The various case laws cited by the appellants mentioned in para 3 (supra) fully support the plea of the appellants that penalties imposed on them were not justified. 7. In Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. (J 159) (S.C.) = 1970 (1) SCR 753 - the Hon ble Apex Court held as follows :- The discretion to impose a penalty must be exercised judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led. The only ground on which the appellant is found guilty of the offence is that he had signed the documents without verification. The penultimate Para 29 of the show cause notice also states that appellant had assisted Ramesh in filing the shipping bill by signing the shipping bill without verifying the contents of the cargo. There was no allegation that appellant had knowledge and he had abetted in the committal of the offence. The penalty has also been imposed solely on the ground that appellant had appended his signature in various documents without due verification of the contents of the goods which was later found to be other than what was declared in violation of provisions of Customs Act. The Tribunal judgment which has been refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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