CESTAT Quashes Penalty Imposed on CHA on Illegal Export of prohibited Red sander Goods on ground of Absence of Direct Involvement of CB [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on the Customs House Agent (CHA) on the illegal export of prohibited red sander goods on the ground of absence of direct involvement of Customs Broker (CB). 

MSK Shipping & Logistics Pvt Ltd, the appellant assessee was a customs broker who had filed the shipping bill on behalf of the exporter of wash basins on behalf of Sanyo Ceramics. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the imposition of a penalty of Rs. 10 Lacs each under Section 114 (i) and under Section 114 AA of the Customs Act,1962. 

Sanjay Kalra, the counsel for the assessee contended that the assessee was not aware of the smugglings of the red sander and they were appointed as CHA and Sanyo Ceramics who had loaded the goods viz wash basins for export and the replacement of the goods en route with red sander was not in the knowledge of the assessee, therefore, they cannot be implicated and no offense was established against them about the smuggling of red sanders. 

Sanjay Kumar, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had not taken immediate action to inform the customs authorities regarding knowledge of red sander being stuffed in the containers therefore, the assessee is liable for penalties. 

The Bench observed that the Commissioner (Appeals) accepted that the assessee did not have direct involvement in the illegal export of prohibited good red sander and penalty imposed against the CHA cannot be sustained. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the penalty imposed under Section 114 (i) and under Section 114 AA of the Customs Act against the CB while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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