The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Penalty u/s114AA of the Customs Act,1962 is not imposable in the absence of false information provided deliberately and intentionally by the assessee.
Shri Arun Goyal, Advocate appeared for the Appellant and Shri Divey Sethi appeared for the Department.
The appellant, Purushottam Kumar Jain is the Customs House Agent (CHA). Vide an order, a penalty of Rupees One lakh each under section 112 (a) & (b) (iii) and under section 114A of the Customs Act, 1962, as imposed has been confirmed against him.
The Department of Directorate of Revenue Intelligence, Jaipur got information about the various importers to have been importing rough precious stones by making huge overvaluation, and that these are not the actual importers but the imports are being managed by someone else behind them.
On examination, huge overvaluation was noticed in consignments as per the Valuation Certificate given by the Expert Valuer. The goods contained were declared as rough precious stone ‘Sapphire’ and the Country of origin was declared as Hong Kong. The value declared was found highly overvalued. The consignment was accordingly seized.
It was stated that the appellant had brought to the notice of the Department that M/s. Rishipushp Trading LLP is an IEC Code holder. The Adjudicating Authority had wrongly concluded that the importer is not an actual importer and the Customs Broker was well aware of this fact. The appellant was wrongly held to have failed to fulfil his obligation as Customs Broker. The penalty also has wrongly been imposed.
It was observed that the penalty upon the appellant has been confirmed on the sole ground that the importer on record i.e. M/s.Rishipushp Trading LLP is not the actual importer where the actual importer is presumed to be Shri Pukhraj Ramdevji Padiyar, he deliberately ignored the same, thereby violating his obligation as Customs Broker.
Dr Rachna Gupta, member(judicial) observed that the findings of the Adjudicating Authority are held to be in total ignorance of the documentary as well as oral evidence on record. It stands clear that the appellant has deliberately and intentionally not provided any such information which was false or incorrect. As such, in my opinion, that penalty under section 114AA of the Customs Act, 1962 has wrongly been imposed upon him.
Penalty under section 112 (a) &(b) (iii) of the Customs Act, which was to a wrong declaration of the value of the goods in the Bill of Entry was observed to be rightly imposed and the Appeal consequently stands partly allowed.
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