The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the penalty under the provisions of the Customs Act, 1962 cannot be imposed on the employees if they are not benefitted/ incentivized by any act of evasion of duty by their master Company.
The appellant Company M/s Global Cambay Marine Service Private Limited, Surat (GCMSL) are engaged in the activity of supply of Ship Store, Water Bunker and other items to the vessels calling at various port of Gujarat. After the investigation, the DRI found that the company was indulging in illegal import of diesel oil. Consequently, the redemption fee and penalty was imposed on the Company. Also, penalty of Rs. 10 lakhs was imposed on Director Sh. Zohar Mallampattiwala and 2 employees Sh. Pattvitti Parukutty Radhakrishnan and Sh. Hanzel Malik.
It was argued before the Tribunal that the person is mere employees and performing their duties as per the instruction of their employer. There is no evidence that they have got an incentive out of the benefit derived by the appellant company.
The bench, after hearing both the sides, noted that the person is mere employees and performing their duties as per the instruction of their employer. There is no evidence that they have got an incentive out of the benefit derived by the appellant company.
Relying on the relevant decision, the Tribunal observed that “the employees cannot be penalized as they do not have believed that the goods are liable for confiscation, moreover, they are mere employee of the company working on fixed salary basis and there is no evidence on record that they were benefited by any act of evasion of duty by the company, therefore, the employees are not liable for penalty. As regards the appeal of Sh. Zoharbhai A Mallampattiwala, since the appellant is expired, his appeal shall stand abated.”To Read the full text of the Order CLICK HERE