The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by K. Natrajan (the Appellant) against the penalty imposed on him by the Commissioner of Customs, Chennai (the Respondent) for importing Chinese phones, as the grounds for the penalty could not be established.
Upon receiving information that Chinese-made mobile phones were being imported by mis-declaring them as branded items, 166 packages were taken up for examination and it was found that they contained 6475 pieces of Chinese mobile phones for which the bill of entry was filed by K. Natrajan. The phones contained markings of branded phone companies which was a violation of IPR (Intellectual Property Rights).
K. Natrajan himself appeared on his behalf but the bench requested Ms. V. Pramila to assist the appellant as Amicus Curie as he was aged and had a slight hearing impediment. He pointed out that the penalty had been imposed for violation of Regulations 13 of the Customs House Agent Regulation (CHALR) 2004 and Section 146 (2) of the Customs Act 1962, but the penalty under Section 112(a) of the Customs Act was not sustainable as the revenue could not establish any mens rea for the import of the phones.
He further submitted that the only allegation against him was that he had not observed due diligence to check the antecedents of the importer as required under Regulation 13 of CHALR, 2004, and pointed out that for such violation, the proceedings under CHALR, 2004 ought to have been initiated by the department, and as there was no evidence that he was involved in the illegal import, the penalty under Section 112(a) could not be imposed on him.
Sathyanarayanan appeared for the department and supported the findings in the impugned order.
The two-member bench consisting of Sulekha Beevi C.S (Judicial Member) and Vasa Seshagagiri Rao (Technical Member) supported the findings of K. Natrajan and held that Natrajan had only assisted in filing the documents on behalf of the importer as required of a CHA Firm and not in personal capacity.
The bench further held that as there was no allegation that Natrajan had committed any act in helping the import of the illegal goods, the penalty imposed was not warranted or justified and the appeal was allowed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
