The Hyderabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) non-awareness of other contraband goods in consignment other than declared in the bill of entry is not an excuse to avoid the penalty under section 117 of the Customs Act, 1962. The bench reduced the penalty being observed that the contravention was of gross negligence.
Sriram Srinivasa Rao, the appellant is before the Tribunal being aggrieved by the penalty of Rs 1,00,000/- imposed on him under section 117 of the Customs Act 1962. The import of the consignment was by M/s Konaseema Exim Traders. The Bill of Entry was assessed to customs duty of Rs 5,35,000/-. The present appellant Shri Sriram Srinivasa Rao was requested by one of his friends, Mr. Rajesh, to make the payment of this amount. The appellant received Rs 5,34,215/- on 8/3/2019 through online mode and after this amount was received, he discharged the Customs Duty in respect of self-assessed Bill-of-Entry.
The appellant submitted that when subsequently the imported consignment was opened and other contraband goods were found inside, the present appellant was in no way connected to them. It was argued that the Adjudicating Authority has given a finding that the appellant has made the customs duty payment which was not required to be made by him at all.
After the self-assessed Bill of Entry was presented along with payment of relevant customs duty, the investigating officials opened the consignment and found that it contained cigarettes valued at Rs. 2,88,00,000/-. He submitted that the present appellant cannot plead that he has absolutely no role in this entire process. He justifies the confirmed penalty on the appellant.
It was contended that the penalty under Section 117 can be imposed only when there has been any contravention of the provisions of the Customs Act. Since no specific contravention has been brought out against the appellant, the penalty imposed under section 117 is required to be set aside.
It was evident that the appellant was not in any way concerned with the import of the consignment. The investigation also did not bring in any evidence to the effect that the present appellant has colluded in the transaction. However, it is a case of gross negligence on the part of the appellant.
Self-assessed Bill of Entry can be put up before the customs officials only after the Customs Duty is paid, which in this case has been done by the appellant, and was not required to be paid by him. Had he not made the payment, the self-assessed Bill of Entry would not have been presented to the customs officials for final clearance of the imported consignment.
“Contravention does not mean that it has to be directly done by the concerned person. Even when he takes up an act which results in a contravention by the importer, still he would be liable for penalty under section 117 of the act,”, the CESTAT observed
A single member bench comprising Mr R. Muralidhar, Member(Judicial) held that “this is more like gross negligence rather than on account of any collusion in the contravention, I reduce the penalty of Rs 1,00,000/- to Rs 20,000/-. The appeal disposed of accordingly.”
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