In a recent case, the Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal, (CESTAT) upheld the penalty under Customs Act, 1962 on the illegal importation of battery and ammonium chloride through mis declaration.
The Appellant, Shri Ajay Kumar Singh is the partner of the Customs Broker firm Babhravi Exim Services and has assailed the Order in Original for imposition of penalty on him under Section 112(a) and Section 114AA of the Customs Act 1962.
The Directorate of Revenue Intelligence (DRI) on the basis of intelligence gathered, regarding illegal import of Chinese Batteries declared as Calcium Carbonate (Coated) kept surveillance on goods imported at the Haldia Port. DRI observed a consignment imported by M/s. S.D. Commotrade International, declared as Calcium Carbonate which was enabled by the present appellant through their Customs Broker firm Babhravi Exim Services.
The appellant is engaged as authorized Custins House Agent (CHA) by M/s. S.D. Commotrade International vide letter dated 01.10.2012 signed by one Mohammed Asgar said to be proprietor of M/s. S.D. Commotrade International. They contended that even prior to the issuance of the authorization letter they were approached by one Shri Raj Kumar Kothari and his business partner Shri Vinod Lachwani regarding import of Calcium Carbonate and that they had come to know of Mohammed Asgar only through an authority letter which was given to the appellant alongwith all requisite documents for import and movement of the container to the CFS by Shri Raj Kumar Kothari.
Subsequently, they sought for KYC documents related to Mohammed Asgar through Shri Raj Kumar Kothari. The Bill of Entry was filed for the subject import of Calcium Carbonate with the DEPB Group on 01.11.2012 and was assessed on the next day. They add, that, as the clearance of goods warranted ADC’s, NOC, they had sent an e-mail on 03.11.2012 at 10.23 A.M to the importer
seeking the ADC NOC related papers duly filled alongwith the original copy of the certificate of origin.
The appellant submitted that they received directions to recall the bill of entry. Subsequently, when the goods were examined by the DRI on 05.11.2012 in the presence of Mohammed Asgar, Raj Kumar Kothari and the appellant, they were found to be not conforming with the declaration/description of the goods and were seized being mis-declared goods.
Further argued that they were not at fault and were bonafidely of the view and acted in good faith. It is their contention, that if at all, their only lapse was handing over of blank documents for facilitating the movement of the cargo trucks from the port to the premises of AL Logistics the CFS.
A two member bench comprising Mr. R. Muralidhar Member(Judicial) and Mr. Rajeev Tandon Member (Technical) observed that “A.K. Singh by his wilful act, despite being aware of the whole factual matrix, has deliberately and consciously played alongwith the key conspirators of mis-declared imports and contributed to the illegal importation of battery and ammonium chloride by filing Bill of Entry mis-declaring the imported cargo as calcium carbonate. The appellant has this certainly rendered himself liable to penal action under Section 112(a) of the Customs Act 1962.”
The CESTAT held that “no case is made out for waiver of penalty imposed under Section 112 (a) of the Act. However, in so far as the appellants have not been made noticee for imposition of penalty under Section 114AA of the Act, no penalty on them can therefore be imposed under the said section. We therefore discharge the appellant from the penalty imposed on them under Section 114AA of the Customs Act. The aforesaid Order in Original passed by the Learned Commissioner is upheld but for the said modification and the penalty imposed under Section 112(a) calls for no interference.”
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