The Chennai bench of the CESTAT, in a recent ruling held that the Customs House Agent cannot escape from liability pleading ignorance of the transaction in a scheme of conspiracy as held by the Madras High Court in the case of Rama ThennaThaylan.
The appellants, R S Aruchalam, faced investigation of filing export documents in which the goods were overvalued. The department held that the customs broker had actively abetted the exporter in the illegal export of red sanders.
Diving deeply into the facts of the case, Judicial Member Ms. SulekhaBeevi observed that “Needless to say that value of the goods are entered in the shipping documents as provided by exporter and the Customs Broker / CHA would have minimal or negligible role to play in the valuation of goods.”
Relying on the High Court ruling, the Tribunal held thatthe CHA in the said case was not a bonafide person and was just collecting rental income by leasing the license; there is positive finding and there is no illegality or perversity in the penalty imposed.
“In para-15 of the judgment, it was observed that in a scheme of conspiracy, the Customs House Agent cannot escape from liability pleading ignorance of the transaction. The Hon’ble High Court upheld the penalty imposed on the CHA,” the Tribunal said.
The above High Court ruling also says that “the licence issued to the Customs House Agent under conditions not to commit any grave offence. If action under the Regulations not sufficient for the grave offence, the Customs House Agent is liable also to be proceeded under the Customs Act. There is no legal impediment to proceed against the Customs House Agent under the Customs Act besides action under the Regulations.”
Dismissing the appeal, the Tribunal concluded that “After appreciating the facts and evidence placed before me, I am of the view that the decision of the jurisdictional High Court in the case of Shri Rama ThennaThayalan (supra) is squarely applicable to the facts of this case. I do not find any merit in the appeals of the appellant. The impugned orders do not call for interference. The same are upheld. The appeals are dismissed.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
