The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), in the absence of evidence of the taxpayer’s authorization as a customs broker under Section 146 of the Customs Act, has reduced the penalty to Rs. 25,000.
The appellant M/S. Pigeon International, had abetted M/s. K T Technologies, New Delhi to import mobile parts through Bengaluru Airport by mis-declaring the value, proceedings were initiated and adjudication authority as per the impugned order revoked the Courier license, enforced the bond and bank guarantee. In addition, a penalty Rs.50, 000/- each was imposed on the appellant under Regulation 14 of Courier Import and Export (Electronic Declaration and processing) Regulations, 2010 and under Section 117 of the Customs Act, 1962. Aggrieved by said order, a present appeal is filed.
Mr. Baby M.A, representing the appellant submitted that the appellant has not committed any illegality as alleged. Where the importer Ms. Kajal Thakur, proprietress of M/s. K.T. Technologies submits that due to difficulty to understand the statement, a statement was recorded earlier to the effect that the shipment does not pertain to her. She further confirmed that they only had imported the goods and took assistance from the appellant and others. They have paid due amounts to overseas suppliers and admitting the alleged illegality, they have agreed to pay differential duty with penalty for the release of goods.
Further submitted that though the adjudication authority relied on the statements recorded from the importer initially and Shri Elias, it is alleged that Shri Elias abetted her. However, in spite of requesting cross examination no opportunity was extended as per the regulation 13A (4) of the Courier Import and Export (Electronic Declaration and processing) Regulations, 2010. Learned Counsel drew our attention to the judgment of the Supreme Court in the case of A K Roy vs. Union of India reported in (1982), wherein it is held that right to cross examination is a natural right even in quasi-judicial proceedings. Further reiterated the grounds of appeal and submits that the proceedings against the appellant are illegal and unsustainable.
It was submitted that there was a gross mis-declaration in the classification, description, quantity, duty etc. in the bills of entries filed for the said consignments, which were intercepted. The shipments were not only filed without proper KYC verifications and authorization of the importer, but were delivered to Mr. Elias, which is in total violation of the extant legal provisions and the KYC norms.
The bench found that the regarding violation of the Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, as per para 47 of the impugned order the appellant appointed Shri M. Elias as an executive and not authorized him as customs broker under section 146 of Customs Act,1962. Thus, in the absence of any evidence regarding authorization of Shri M. Elias as customs broker under section 146 of Customs Act, 1962 to carry out the activities of the courier agent, violation of the Regulation 12(ii) is sustainable as held by the adjudicating authority.
Further find that as regards the penalty under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, considering the revocation of the courier license, since September 2023, a lenient view can be taken. Thus, the penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 is reduced to Rs. 25,000/-
The two member bench of the tribunal comprising P.A Augstian ( Judicial member) and Pullela Nageswara Rao ( Technical member) concluded that the impugned order was modified and appeal is partially allowed by setting aside revocation of Courier License and enforcement of Bond and Bank Guarantee executed in connection with the Registration/Issue of Courier License. In view of the discussion at Para 9 (supra), the penalty imposed on the appellant under Section 117 of the Customs Act, 1962 is set aside. The penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 was reduced to Rs. 25,000/-(Rupees Twenty Five Thousand only)
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