No Reason for Imposition of Penalty: CESTAT quashes Penalty of Rs. 2 lakhs under Customs Act [Read Order]

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed penalty of Rupees 2 lakhs under Customs Act on the ground that the reason for imposition of penalty was not mentioned.

The appellant,M/s Rishad Shipping and Clearing Agency Pvt. Ltd, is engaged in the business of customs clearance. The appellant had filed two shipping bills both on behalf of M/s Shaina Enterprises and the check-list and the Annexure-C were signed by Sunil Nagvekar, who was “G” category pass holder of the appellant.

An investigation was carried out in respect three shipping bills including the above stated two shipping bills and it was revealed that the said shipping bills were under the claim of drawback and drawback was allowed to the exporter. The investigation revealed that foreign inward remittance was not received against the export of goods exported through the above said two shipping bills.

The drawback paid was recovered and the same was deposited to the Exchequer. A show-cause notice was issued to the exporter, the appellant another Custom House Agent. The appellant was imposed with penalty of Rs. 02 lakhs under Section 114(i) of the Customs Act, 1962 and another penalty of Rs.1.0 lakh under Section 117 of the Customs Act, 1962.

The Counsel for the appellant argued that the penalty under said Section 114 is imposed for contravention of provisions of Section 113 of the Customs Act, 1962. The appellant could not produce any authority letter received from the exporter and, therefore, it cannot be held that appellant was reasonable for confiscation of goods and that have submitted that respondent had not produced any corroborative evidence to show that the appellant had abated the exporter.

The Tribunal of Anil G. Shakkarwar, Member (Technical) observed that “I find that there is no finding recorded by the original authority as to why the original authority had imposed penalty under Section 114(i) of the Customs Act, 1962 in the original order. The original authority without giving any reason why penalty under Section 114(i) of the Customs Act, 1962 is liable to be imposed on the appellant, has imposed the said penalty.”

“Therefore, the said part of the Order-in-Original is not sustainable. I, therefore, set aside the penalty of Rs. 2.0 lakhs imposed on appellant under Section 114(i) of the Customs Act, 1962” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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