Penalty on Co-Noticee u/s 112(a) of Customs Act Set Aside by CESTAT: Mere Classification Dispute Not Grounds for Confiscation [Read Order]
Penalty Not found Sustainable as Goods Are Not Liable for Confiscation
CESTAT Mumbai, Penalty on Co-Noticee, Customs Act
CESTAT Mumbai, Penalty on Co-Noticee, Customs Act
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside a penalty of ₹1 lakh imposed on appellant under Section 112(a) of the Customs Act, 1962, holding that no penalty can be imposed on a co-noticee when the primary noticee has been exonerated.
The appellant, Kwick Cargo Tracers & Lifters, had challenged the Order-in-Original dated January 6, 2017 passed by the Commissioner of Customs (NS-III), Nhava Sheva. The appellant, a Customs House Agent (CHA), was a co-noticee in the impugned proceedings, while Sirthai Superware India Ltd. was the main noticee.
The issue pertained to the import of Melamine ware (Kitchenware and Tableware) by Sirthai Superware India Ltd., the main noticee. The revenue alleged misclassification of the imported goods and demanded differential duty along with penalties under Section 112(a) from both the importer and the CHA.
The importer had already challenged the same order before the Tribunal in Customs Appeal, wherein the Tribunal, vide Final Order dated October 10, 2019, set aside the penalty imposed on the importer. The Tribunal held that the case involved an erroneous classification rather than any deliberate misdeclaration, and therefore confiscation under Section 111 and penalty under Section 112(a) were not sustainable.
Referring to that judgment, the Tribunal observed: “The fact that the goods correspond to declaration in respect of the description and value is sufficient to take the imported goods away from the application of these two clauses.”
In light of the above, the Tribunal in the present appeal noted that since the penalty on the importer was held unsustainable and the goods were not held liable for confiscation, no penalty could be imposed on the CHA, who was merely a co-noticee in the proceedings.
Allowing the appeal, Ajay Sharma (Judicial Member) set aside the penalty and granted consequential relief to the appellant.
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