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TMI Blog2023 (7) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... duary penal provision, and is applicable when no other express penalty provision is available. In the instant case, this Court is concerned with penalty which was initially purposed under Section 112 without quoting any sub-clause. However, same was later confirmed under Section 112(a) of Customs Act, 1962. Nothing has been brought on record as to show, how due diligence on the part of the employer (located miles away, from employee) is lacking, specially when it has prescribed percentage checks provided radiation detecting equipments as has been indicated by the investigation and also employed qualified persons - the invoking of Section 112(a) requires mens rea to be established on record. This Court is of the view that penalty as imposed does not sustain both in law and in the facts of the matter. The appeal is allowed with consequential relief of wavier of penalty under Section 112(a) as imposed - Appeal allowed. - CUSTOM Appeal No. 11010 of 2014-SM - A/11518/2023 - Dated:- 14-7-2023 - MR. SOMESH ARORA, MEMBER (JUDICIAL) Shri. Vikas Mehta, Consultant for the Appellant Shri. Himanshu P Shrimali, Superintendent (AR) for the Respondent ORDER The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the part of its employee, i.e., Mr. Bob in the course of examination of cargo at the time of loading of containers in UK) and not the appellant by itself. 4. It was submitted that Mr. Bob examined the goods in UK (outside India). The Pre- Shipment Inspection Certificates were issued in USA (outside India). Hence, the act of 'omission' had taken place outside India. The jurisdiction of Customs Act, 1962 was extended to offence or contraventions committed outside India by virtue of The Finance Act,2018 with effect from 01.04.2018. In this case, offence had taken place in 2011. Hence, the Show Cause Notice is without jurisdiction, as the offender was not an Indian national 4.1. It was submitted that the allegation regarding lack of diligence or negligence against appellant is mis-directed inasmuch as appellant is based in India whereas goods were examined in UK by their employee Mr. Bob. Hence, omission or commission, if any, in failing to detect the bomb shells could be on the part of Mr. Bob and not the appellant. Hence, appellant is not liable to penalty under Section 112 (a) of Customs Act, 1962. 4.2 Without prejudice to above, reliance was placed on the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anch head/authorized signatory of the branch would issue the pre-shipment inspection certificate to the overseas supplier or Indian importer for submission in accordance with the procedure prescribed in the HBP. In the normal course of business, the U. S. A. based office of the appellant issued two pre-shipment inspection certificate bearing No. UK-IN 101811-62769 (in respect of 98.520 MT of cast iron scrap that was thereafter loaded in 4 containers) and certificate bearing No. UK-IN 092611-62170 (in respect of 429.540 MT of cast iron scrap that was thereafter loaded in 17 containers) consigned to M/s. Alang Metal Exim Pvt. Ltd., India. Based on visual inspection at the time of loading spot radiation testing using a hand held monitor carried out by London-based inspector Shri Bob Rushton at the scrap yard at Kenninghall Road, London, the U.S.A. based office of the appellant had issued the aforesaid certificates stating that the consignment did not contain any type of arms, ammunition, mines, shells, cartridges, or any other explosive material in any form, either used or otherwise. On import of the above consignments at Pipavav, M/s. Alang Metal Exim Pvt. Ltd. filed two bills of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contained in Order-In-Appeal, also brought to the notice of this Court para 2.3.2.2B of Hand book of procedure of the exim policy as was existing doing relevant time. this para is reproduced below:- 2.32.2B Responsibility and Liability of PSIA and Importer (a) In case of any mis-declaration in PSIC, PSIA would be liable to pay a penalty upto Rs. 10 Lakhs (if the agency is based in India) or up to US $20,000/- (if the agency is based in foreign country), in addition to suspension/cancellation of recognition. (b) The importer would also be responsible for import of any material in contravention of the declaration as required under Para 2.32.2 of HBP Vol. I and would be liable to pay penalty upto Rs. 10 Lakhs. 8. Disputing the above position, the Learned Advocate for party submitted that the appellant is a resident of India. The goods in question were inspected by Shri Bob in London and the certificates were issued by the U.S.A. office on the basis of inspection report sent by Shri Bob from London. Thus, the appellant had neither inspected the goods nor issued the certificates. Therefore, the conduct of the appellant does not satisfy the requirement of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying, removing, depositing etc. are understood. In other words, any other manner of dealing with the goods is also some physical manner of dealing with the goods. In the impugned order, there is no finding that the appellant physically dealt with the goods in question, nor was any allegation to this effect raised against him in the relevant show cause notice. Therefore, the provisions of Section 112(b) were not applicable to the case. It would follow that the penalty imposed on the appellant is not sustainable on facts or in law. It was submitted that in the facts and circumstances of the case where both the events, viz. inspection of goods and issuance of the pre- shipment inspection certificates have been place outside the territorial limits of India, the decision of Hon. Tribunal in the case of C. K. Kunhammed v/s Collector of Central Excise Customs, 1992 (62) ELT 146 (T) would squarely apply to the case. Consequently, Ld. Adjudicating Authority has erred in imposing penalty on the appellant under section 112 (b) of the Customs Act, 1962. In the case of C, K. Kunhammed, Hon. Tribunal has observed as under: 6. I have carefully considered the submissions made befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to drop the proposal to impose penalty under section 114AA of the Customs Act, 1962. Similarly, Ld. Commissioner (Appeals) has also held in the impugned order that no evidence is found on record to establish that the appellant had knowingly, willingly and intentionally issued the pre-inspection certificates. Therefore, having already held that there is no evidence regarding presence of knowledge on the part of appellant in issuing the certificates under consideration, Ld. Commissioner (Appeals) could not have sustained personal penalty on the appellant under section 112 (b) or 112 (a) of the Customs Act, 1962. In this case, having already held that the certificates were issued without knowledge or willingness or intention of the appellant to do so, imposition of penalty on the appellant under section 112 (b) of the Customs Act, 1962 is not sustainable in the eyes of law. It was submitted that imposition of personal penalty under section 112 (b) of the Customs Act, 1962 on the appellant who had neither inspected the goods nor issued the certificates, is mis-directed and therefore, the same was not sustainable in the eyes of law. It was further submitted that the lower authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 . In view of the above dictum of law with regard to the statement recorded under Section 108 of the Act coupled with concurrent findings of fact arrived at by the adjudicating authority and the CESTAT, we are not inclined to interfere as no perversity is pointed out in such factual findings arrived at by the both the authorities. For the foregoing reasons and considering Section 112(a) of the Customs Act which provides that penalty against person who in relation to any goods does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111 or abets the doing or omission of such an act, penalty can be imposed not exceeding the value of the goods or five thousand rupees whichever is greater. Therefore, invoking such provision would require mens rea on part of the appellant which is duly established on record. (emphasis supplied) 9.1 In view of the forgoing and due to a uncontested finding on record about lack of knowledge emerging both from investigation as well as Order-In-Original which is reproduced below: para 22.3........................no evidence was found on record to establish that the Inspection Agency had kn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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