CHA is Processing Agent on Documents of Clearance of Goods through Customs House: CESTAT quashes Penalty on Absence of Prior Knowledge on Mis declared Goods

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the penalty on absence of prior knowledge on mis declared goods and observed that a Customs House Agent (CHA) is a processing agent on documents of clearance of goods through customs house.

The investigating team found that M/s National Enterprises has two Directors Daljit Singh and Satyender Singh. They hired a Customs House Agent namely Ontime Logistics, now known as VKL Cargo (the appellant) which was owned by two partners. Satyender Singh, the appellant was the G-Card holder.

The counsel for the appellant submitted that no opportunity of cross-examination was ever given to the appellants and it was mentioned that law has been settled that no statement can be relied to fasten any charge on any person which has been recorded at his back without affording him the opportunity to cross-examine the person making the statement.

The Departmental Representative contended that during investigation the exporting firm was found non-existent at the given address. The address of the Directors was also found incomplete and it was sufficient violation of the obligations of Customs House Agent.

The Counsel for the Department further contended that the Customs House Agent and its employees have acted negligently with the sole intent to connive with the exporter to proceed with mis-declaration of description and value so as to get more drawback.

The Tribunal of Dr Rachna Gupta, Judicial Member observed that except the statements that too full of contradictions and that none of the deponents were being cross-examined by the appellant herein it is held that there is no evidence to attribute the said mens-rea with the appellants to abate with the exporter for gross mis-declaration in description and value of the consignment.

“It is clear that there is no such evidence on record which may prove knowledge with the appellants about the alleged mis-declaration. In such circumstances, the order imposing penalties upon the appellants is now sustainable” the Tribunal noted.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates