The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that penalty under Customs Act, 1962 cannot be imposed on employees of Customs House Agent (CHA) on charge of wrong availability of drawback by the exporter.
Pratik Bhansali, the appellants worked at M/s. A. V. Joshi & Company, a container freight station at Kandla. In April 2017, he was approached by Shri Alok and Shri Arvind on behalf of the exporter firm M/s. Haresh Fashion for the export of woven girl fancy frocks from MMF, and he received two samples through courier. He sent it to Balaji Naidu, the customs broker.
The exporter, through Custom Broker, filed two shipping bills bearing Nos. 6293441 and 6293292 under duty drawback scheme with Custom House, Kandla, for the export of goods declared as Woven Girls Fancy Frock-MMF by declaring FOB value as Rs. 1,48,51,872.00 and Rs. 1,03,96,310.40, respectively. The officers carried out a market survey and obtained a report based on which the market price was ascertained as Rs. 40 to Rs. 55 per piece.
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The report contains no details of the source from which this opinion was obtained. The declared value was rejected and re-determined as Rs. 8,09,400/- and Rs. 5,58,600/-. It was also ordered to change classification from CTH 6204 1919 to CTH 6204 4390. The goods entered for export were confiscated, and an option to redeem them was given to the exporter.
With regard to Shri Pratik Bhansali, a penalty of Rs. 10.0 lakh under Section 114(i) and a separate penalty of Rs. 15.0 lakh under Section 114AA of the Customs Act, 1962, were imposed on the ground that he was assured a 40% share of duty drawback, and hence, he overvalued the goods.
The appellant contended that they are neither exporters nor customs brokers. He was merely an employee of the Container Freight Station. In any case, he is not an expert in the valuation of fabrics. In his statement dated June 12, 2017, he stated that he is not concerned with the value of goods. The appellant is falsely implicated by recording in his subsequent statement that his earlier statement was incorrect inasmuch as he had suggested a higher value to Custom Broker and was assured a 40% duty drawback.
The two member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the appellants are neither the exporter of the goods nor the CHA. The entire case of overvaluation is attributed to exporters and CHA. As far as the allegation of fraudulent claim of duty drawback by overvaluing the goods, the beneficiaries are the exporter. All three appellants have no locus standi to either claim the drawback or receive the drawback.
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The tribunal held that the appellants were merely employees of CHA therefore, he has performed his duty on the instructions of his senior, and it is also a proven fact that he has not been benefited by attempting to claim an excess drawback from the exporter.
Vikas Mehta appeared for the appellant and A R Kanani appeared for the respondent.
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