The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on the mediator acting as a broker dealing with all trading of advance license on the ground of unawareness of the assessee of fraudulently obtained license. The revenue stated that the assessee dealing with all trading of advance license which was forged or obtained fraudulently.
Tejinder Singh Makkar, the appellant assessee acted as a broker between the seller of advance license and the assessee appealed against the order passed by the Commissioner of Customs for confirming the penalty imposed under section 112 (b) of Customs Act, 1962 and Rule 209 A of Central Excise Rules, 1944.
G.B Yadav, the counsel for the assessee contended that the penalty imposed on the assessee cannot be sustained which was decided in the famous case T. S Makkar Vs. Commissioner of Central Excise, Surat.
Further submitted that there was no direct clinching evidence, oral or documentary, proving awareness on the part of the assessee that the licenses were fake, forged, or fictitious and the assessee was aware of the fake, forged, or fictitious nature of the licenses.
Vijay G. Iyengar, the counsel for the department relied on the decisions made by the lower authorities and contended that the penalty imposed under section 112 (b) of the Customs Act and Rule 209 A of Central Excise Rules was as per the law and liable to be sustained.
Also stated that the assessee was aware of the fake, forged, or fictitious nature of the licenses and thus the penalty imposed by the department was right and sustainable in the eyes of the law.
The Bench observed that in one of the cases decided by this Tribunal’s majority decision, the assessee having the same alleged role, the penalty was set aside and the present assessee involved in the above case was similarly placed as broker for advance license and by the majority decision, the penalties were set aside.
A single-member bench comprising Ramesh Nair (Judicial) held that the penalty imposed by the department was not sustainable and quashed while allowing the appeal filed by the assessee.
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