Intentional Violation of Regulation 12: CESTAT upholds Cancellation of License and Imposition of Penalty [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), New Delhi, has recently in an appeal filed before it, held that intentional violation of regulation 12 will lead to the cancellation of license as well as the imposition of penalty.

The aforesaid observation was made by the Tribunal, when an appeal was filed before it by M/s Sitex International, New Delhi, assailing the order in original dated 04.12.2020, whereby the appellant’s license under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 was revoked, the security deposit made by the appellant was forfeited and a penalty of Rs. 50,000/- was imposed upon the appellant.

The facts of the case were that the appellant was a proprietorship firm which had been issued a license under Regulation 10. In 2019, the appellant had filed 37 couriers bills of entry, all dated 10.10.2019, at the courier terminal in Delhi, and on examination of the goods in respect of these 37 bills of entry, it was so found by the customs officers that the goods were declared to be household items while they were actually food supplements and ladies suits imported in commercial quantities.

The appellant’s main business being in Chennai and the proprietor of the appellant firm being Shri A. Kader Riswan, he had extended his business to Delhi and appointed one Shri Azarouddin Ansari Kadar as the Assistant Manager (Delhi). And it was Shri Azarouddin Ansari who had filed these 37 courier bills of entry in the name of the appellant firm, declaring the imported goods as household items.

However, on investigation it was found that 37 names of the consignees in the bills of entry were wrong, and that these 37 “consignees” had earlier imported some goods through the appellant and, therefore, that the appellant had all of their details including their KYC documents. And it was using these details that goods were imported in the name of these 37 consignees, all of who confirmed that the goods did not belong to them.

Thereafter, investigation was conducted, which revealed that the entire consignment belonged to one Shri Mukesh Rana, who engaged the appellant to clear the goods, subsequent to which the Statement of Shri Azarouddin Ansari was recorded by the officers on 14.10.2019, who confirmed that he had filed the bills of entry for the aforesaid 37 consignments and that it was done with the full knowledge of the imported goods being commercial goods and not household goods as declared on the Bills of Entry.

After completing the investigation and following due process, the order-in-original dated 28.2.2020 was passed by the Additional Commissioner of Customs whereby the goods were confiscated, the duty was re-assessed and penalties were imposed upon Shri Anmol Krishna Murthy who claimed to be the owner of the goods, against which the present appeal has been preferred by the appellants before the Tribunal.

With Ms. Vibha Narang, Advocate for the Appellant, submitting that simply because an employee of the appellant had committed an error or fraud, the licence of the appellant should not be revoked, Shri Nagendra Yadav, the Authorized Representative for the Respondent, strongly opposed this submission.

Hearing the opposing contentions of both the sides and perusing the materials available on record, the bench consisting of Dr. Rachna Gupta, the Judicial Member and P.V. Subba Rao, the Technical Member, observed:

“we find that for the various contraventions of these regulations the appellant was correctly held liable to penalty under Regulation 14 and penalty of Rs. 50,000/- as was imposed by the Commissioner in the impugned order”.

“In view of the above, we find that the impugned order is correct and proper and calls for no interference.”, dismissing the appellant’s appeal, the Bench ruled.

To Read the full text of the Order CLICK HERE

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