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TMI Blog2024 (11) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... r Trade Pvt. Ltd. facilitated the import of PVC resin to non-existent entity i.e Blazeing Star on the basis of fake Advance Authorisation and GST certificate and whether penalty under Section 117 of the Customs Act is imposable on M/s Saarthee Shipping Co. (Custom Broker)? - HELD THAT:- We find that Appellant and Blazeing Star entered into a High Sea Sales agreement wherein Blazeing Star imported the said goods vide Bills of Entry No. 5440564 dtd. 14.09.2021 under Advance Authorisation and another Bill of Entry No. 5548138 dtd. 22.09.2021 without duty under Advance Authorisation. After the investigation, revenue alleged that Blazeing Star is fictitious and non-existent entity. Appellant vide its letter dtd. 17.01.2022 and 18.02.2022 requested to cancel the High Sea Sales Agreement and requested to allow to amend the Bill of Entry dtd. 14.09.2021 and 22.09.2021. Deputy Commissioner of Customs House, Mundra vide letter dtd. 07.06.2022 accepted the request of the Appellant and directed them to make payment of duty, execution of Bond/ Bank Guarantee etc., and on payment of duty and on furnishing of Bond/Bank Guarantee, the Bills of Entry were amended. The said goods were released provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument made/signed by the Appellant are High Sea Sales agreements which are not alleged to be fake/incorrect. From the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the transaction of any business under the Customs Act, 1962. In the present case nothing has been brought on record by which it can be said that the appellant had made or caused to be made any declaration/used or caused to be used any statement or document which is false or incorrect. No document etc., which has been produced by him was found to be materially wrong. As the ingredients for invocation of provisions of Section 114AA are absent in the present case penalty under the said section is not justified. As it is clear, penalty under Section 117 are for contravention, not expressly mentioned. But, there should be sufficient evidences to show mala fide intention resulting in contravention of any provisions warranting penalty. There is no material on record to conclude that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to allow them to pay the duty to clear the goods. When no reply was received from the importer M/s Blazeing Star Trade Pvt. Ltd., the request of M/s Sunil Taneja Associates was considered and they were allowed to amend the Bills of Entry in their name and accordingly, the Bills of Entry were amended and assessed provisionally on payment of duty and execution of bond/B.G. 1.2 In view of above investigation, show cause notice dtd. 17.05.2023 was issued to the Appellants asking them to explain as to why the goods covered under the impugned Bills of Entry should not be assessed finally with full duty of Rs. 79,94,853/- and duty of Rs.79,94,853/- and interest of Rs. 10,70,374/- paid by M/s Sunil Taneja Associates should not be appropriated; the goods covered under the impugned Bills of Entry should not be confiscated under the provisions of Section 111(m) of the Customs Act, 1962 and penalty should not be imposed under Section 112(a)and/or 112(b) of the Customs Act, 1962 and 114AA of the Customs Act, 1962 ; penalty should not be imposed under Section 117 of the Customs Act, 1962 on M/s Saarthee Shipping Co. (Customs Broker). In adjudication, by impugned Order-in-Original dated 16-05-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, the Appellant was entitled to 2% CIF value as consideration. Other than this consideration, the Appellant has not gained in any way from the alleged contravention. In fact, the Appellant did not receive their 2% on CIF value from M/s Blazeing Star and had to amend the Bill of Entry and pay the entire duty on the consignments imported by M/s Blazeing Star. Had the Appellant in connivance with Blazeing Star imported the goods under fake Advance Authorisation, the Appellant had gained something over and above the consideration price. In the absence of any gain/benefit from the alleged act, the Appellant ought not be penalized. 2.4 He also submits that the provision of Section 114AA applies only when a person knowingly or intentionally makes incorrect or false documents. In the present case, the Proprietor has not produced any documents which is fake or incorrect. In the present case, neither the Revenue has brought any false documents submitted by the appellant nor have they have shown knowledge on the part of the Appellant in submission of false Advance Authorisation and GST certificate, therefore, the Ld. Commissioner has wrongly imposed penalty under Section 114AA. He p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as facts on record. The issue that comes up for decision is whether the Appellant and its proprietor are liable to pay penalty under Section 112(a)(ii) and 114AA of the Act, respectively, along with redemption fine on alleged premise that the Appellant in connivance with High Sea Buyer i.e M/s Blazeing Star Trade Pvt. Ltd. facilitated the import of PVC resin to non-existent entity i.e Blazeing Star on the basis of fake Advance Authorisation and GST certificate and whether penalty under Section 117 of the Customs Act is imposable on M/s Saarthee Shipping Co. (Custom Broker). 4.1 We find that Appellant and Blazeing Star entered into a High Sea Sales agreement wherein Blazeing Star imported the said goods vide Bills of Entry No. 5440564 dtd. 14.09.2021 under Advance Authorisation and another Bill of Entry No. 5548138 dtd. 22.09.2021 without duty under Advance Authorisation. After the investigation, revenue alleged that Blazeing Star is fictitious and non-existent entity. Appellant vide its letter dtd. 17.01.2022 and 18.02.2022 requested to cancel the High Sea Sales Agreement and requested to allow to amend the Bill of Entry dtd. 14.09.2021 and 22.09.2021. The Deputy Commissioner of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proprietor had any connection with Blezeing Star. Importantly, the Appellant on realising that the original importer may be fictitious, paid entire duty along with interest. We also agree with the argument of Ld. Counsel that for imposition of penalty mens-rea has to be established about the wrongful act. In the present case, the only document made/signed by the Appellant are High Sea Sales agreements which are not alleged to be fake/incorrect. 4.4 Further from the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the transaction of any business under the Customs Act, 1962. In the present case nothing has been brought on record by which it can be said that the appellant had made or caused to be made any declaration/used or caused to be used any statement or document which is false or incorrect. No document etc., which has been produced by him was found to be materially wrong. As the ingredients for invocation of provisions of Section 114AA are absent in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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