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TMI Blog2021 (12) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ee one Ravi working at Tuticorin. The very admission itself is sufficient to hold that the appellant was reckless and negligent in using his Customs House Agent Licence. The declaration of goods found in the shipping bill hold sway by Annexure A. In a scheme of conspiracy, the Customs House Agent cannot escape from liability pleading ignorance of the transaction - Plea that action against the erring Customs House Agent can be initiated only as per the procedure under CHALR 2004 and not under Section 114(i) of the Customs Act is baseless argument. It is clear that the appellant had not discharged these obligations, which cast on him. It is a case where under the guise of Coco Peats, prohibited goods namely, Red Sanders weighing 10.760 MTs. has been transported. The DRI based on the intelligence gathered, had rescued the goods and found the Cargo was transported based on the Annexure A containing the signature of the appellant Customs House Agent. Customs House Agent is governed by the Regulations framed by the Government in exercise of the powers conferred under the Customs Act, 1962. Therefore, misdeclaration of goods and attempt to export such goods is punishable under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Tuticorin. The statement of R.Sivaraman revealed that the Customs House Agents Licence of M/s.Vector Freight Forwarders was used by them for preparing the shipping bills and the container was stuffed with red sanders mis-declaring it as Coco Peat at the instance of one J.Francis Kumar, Marketing Executive of M/s.Sai Freight Private Limited, Tuticorin. The further investigation revealed that the shipping bill prepared by him on obtaining the signature of Customs House Agent [CHA] through Shri G.Ravi of M/s.Vector Freight Forwarders [the appellant herein]. 4.According to the appellant, G.Ravi was their employee operating at Tuticorin and blank Annexure A was handed over to him, since the appellant was operating from Coimbatore and six Annexures were required at Tuticorin. The show cause notice dated 27.01.2009 was served on Muthu and George by D.R.I. under the Customs Act, 1962 and the Foreign Trade (Development and Regulation) Act, 1992 to the persons involved in illegal export of 10.760 MTs. of Red Sander logs to Malaysia. The appellant herein is one among them. After enquiry, penalty of ₹ 10,00,000/- was imposed on the appellant under Section 114(i) of the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms House Agent is not liable for any mis-declaration. Annexure A is based on other shipping documents including the invoice and the shipping bill. Therefore, for the misdeclaration or substitution of the goods in the course of transit, the Customs House Agent cannot be held liable. Section 50(2) of the Customs Act, 1962 is not applicable to the appellant, being a Customs House Agent. Similarly, there is no contravention of Customs Act by the appellant to impose penalty under Section 114(i) of the Customs Act, 1962. For any violation of the Customs House Agent Licensing Regulations, which is a Code by itself, the authorities can proceed against the Customs House Agent only under that Regulation and not under the Customs Act. Therefore, the CESTAT is not correct in holding that the appellant is liable for penalty under Section 114(i) of the Customs Act, 1962. 8.The learned counsel appearing for the appellant would submit that time and again the Courts have held that the Customs House Agent cannot be held liable for mis-declaration or misuse of the licence, if any third party without knowledge of the Customs House Agent, exports prohibited goods by mis-declaration. Further, he wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 on the appellant even while the appellant has not contravened any of the provisions of the Customs Act, 1962? 2.Whether the first respondent Tribunal was correct in rendering a finding that the appellant has violated Section 50(2) of the Customs Act, 1962 while the said provision relates to declaration being made by the Exporter in the shipping bill and whether the imposition of penalty is sustained when the appellant is not the Exporter? 3.Whether the enhanced penalty is sustainable? 4.Whether the first respondent Tribunal was correct in holding that the appellant is liable to penalty under Section 114(i) of the Customs Act, when it is apparent on the face of the record that the Customs Officers have affixed their seal and certified that the container under export contained goods as declared in the shipping bill and the appellant went by the certification of the Customs Officers in presenting shipping documents for export? C.M.A.(MD)No.917 of 2014:- 1.Whether the Tribunal was correct in confirming the penalty under Section 114(i) of the Customs Act, 1962 on the appellant even while the appellant has not contravened any of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of goods has to be dealt with based on mens rea to the contribution of the Customs House Agent allowing the smugglers to misuse the licence issued to him. 14.A Division Bench of this Court in almost identical facts of the case in K.V.Prabhakaran Vs. Commissioner of Customs, Chennai reported in 2019 (365) E.L.T. 877 (Mad.) [C.M.A.No.2940 of 2017, decided on 30.10.2017] has held that lending the CHA licence to a third party for usage without knowing the actual importer and the goods to be imported, is a serious issue. Misuse of CHA licence or reckless and careless lending of the same, the unscrupulous person for facilitating smuggling activities should be viewed seriously and held that imposition of penalty by invoking the provisions of the Customs Act is not only justifiable but also acceptable. 15.In the present case, Red Sanders has been stealthily exported to Malaysia in a Container bearing No.VMLU 3200873 covered under Shipping Bill No.1955099, dated 09.07.2008 along with Annexure A signed by the appellant herein. It is admitted by the appellant that the blank signed Annexure A was handed over to his employee one Ravi working at Tuticorin. The very admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast on him. It is a case where under the guise of Coco Peats, prohibited goods namely, Red Sanders weighing 10.760 MTs. has been transported. The DRI based on the intelligence gathered, had rescued the goods and found the Cargo was transported based on the Annexure A containing the signature of the appellant Customs House Agent. Customs House Agent is governed by the Regulations framed by the Government in exercise of the powers conferred under the Customs Act, 1962. Therefore, misdeclaration of goods and attempt to export such goods is punishable under Section 114 of the Customs Act. A Customs House Agent, who is a party to the mis-declaration, is liable to pay penalty not exceeding three times of the value of the goods mis-declared. The first respondent Tribunal is empowered to enhance the penalty imposed, if the penalty imposed is not adequate. Further, the provisions under the Regulations to punish the Customs House Agent for violation and contravention of the Regulations is in addition to the penal provisions prescribed under the parent act, namely, the Customs Act. It is incorrect to say that the Customs House Agent is liable only under the Regulations for any violation and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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