No Penalty against CHA for Unknowingly Filling Shipping Bills of Prohibited Goods: CESTAT [Read Order]

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The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in Daroowala Bros & Co. & Anr. vs. Commissioner of Customs (Gen.) set aside the penalty imposed on the Customs Housing Agent (CHA) for unknowingly attempting to clear prohibited goods.

The appellant, M/s. Daroowala Brothers & Co, a Customs Housing Agent (CHA) tried to file Manual Shipping Bills of Exporter Bernard Moris Gerald. The export was with respect to mix sizes of Indian Teakwood of total freight on Board value of Rs.21.02 Lacs. It was found that the goods attempted to be exported is prohibited goods under the provision of Schedule 2 of Exim Policy read with Foreign Trade (Development and Regulation) Act, 1992 of Customs Act, 1962. Accordingly, goods were confiscated under Section 113(d) and (h) of the Customs Act, 1962, the penalty of Rs. 2 lacs were imposed on the exporter Barnard Moris Gerald, Pune and also penalties were imposed of Rs. 2 lacs and Rs. 1.5 lacs on Daroowala Brothers and Company and Pervez Irani.

The Counsel for the appellant argued that the appellant had no knowledge of the facts that goods to be exported were prohibited goods as the exporter in his documents had declared the same to be mix size Indian teakwood. He further contended that shipping bills were filed on the basis of documents provided by the exporter and that he has no malafide intentions to attempt the exports of prohibited goods and therefore appellant should not be liable for any penalty. He submitted that the appellant being CHA having the limited role, should not be fastened with the penalty. He argued that appellant being CHA prepared the check of the list in line with Customs House Agents Licensing Regulations (CHALR) 2004 based on export documents submitted by the exporter. The Counsel for the Revenue reiterated the findings of the lower authority.

The Bench comprising of Judicial Member Ramesh Nair found that the appellants were only the Customs Housing Agents (CHA) and had filed shipping bills only on the basis of documents provided to them by the exporter.

“The appellants were not aware about the technical characteristic of product; therefore, it cannot be said that appellant have knowingly attempted to clear prohibited goods for export. It is also observed that in the statement of exporter, he has not implicated the appellant regarding mis-declaration of the goods. The appellant also in their statement clearly stated that they were not knowing about the goods being prohibited. In this fact, I find that appellant being CHA having limited role for filing the shipping bill that too on basis of documents provided to them cannot be held guilty for attempting the export of prohibited goods, therefore in my considered view the appellants are not liable for penalty.” said the Tribunal.

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