The Madras High Court quashed the plea for enhancing the penalty imposed on Customs House Agent for mis-declaration of goods.
The appellant, Rama Thenna Thayalan has challenged the order of the CESTAT allowing the appeal of the Department for enhancement of penalty and thereby, enhancing the penalty from Rs.3,00,000/- to Rs.5,00,000/-.
The appellant would submit that time and again the Courts have held that the Customs House Agent cannot be held liable for mis-declaration or misuse of the licence, if any third party without knowledge of the Customs House Agent, exports prohibited goods by mis- declaration.
The division bench of Justice S.Vaidyanathan and Justice G.Jayachandran noted that mis-declaration of goods and attempt to export such goods is punishable under Section 114 of the Customs Act. A Customs House Agent, who is a party to the mis-declaration, is liable to pay a penalty not exceeding three times of the value of the goods mis-declared. The first respondent Tribunal is empowered to enhance the penalty imposed, if the penalty imposed is not adequate. Further, the provisions under the Regulations to punish the Customs House Agent for violation and contravention of the Regulations is in addition to the penal provisions prescribed under the parent act, namely, the Customs Act.
The court observed, “It is incorrect to say that the Customs House Agent is liable only under the Regulations for any violation and contravention. The licence issued to the Customs House Agent under conditions not to commit any grave offence. If action under the Regulations is 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.”
“We hold that there can be no excessive exercise of power in imposing a penalty of Rs.5,00,000/-. Hence, this Court holds that the appeals challenging the order of CESTAT deserves to be dismissed, accordingly, dismissed. Consequently, connected Miscellaneous Petitions are closed,” the court said.
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