Custom, Excise & Service Tax Tribunal
Zion Express Cargo Pvt Ltd vs New Delhi(Import & General) on 23 December, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
New Delhi
PRINCIPAL BENCH - COURT NO.4
Customs Appeal No. 55889 Of 2013
[Arising out of Order-in-Original No. 33/NLB/Adj/2012 dated 08.11.2012 passed by
the Commissioner of Customs (Import & General), New Customs House, New Delhi]
Zion Express Cargo Private Limited : Appellant
SCO 28 & 30, HUDA, Commercial Complex
Sector -18, Gurgaon
Vs
Commissioner of Customs : Respondent
(Import & General), New Customs House, New Delhi 110037 APPEARANCE:
Ms.Archana Sharma, Shri NavneetTanwar, Advocates for the Appellant Shri Dhanshekharan, Special Counsel for the Respondent CORAM :
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) FINAL ORDER No. 59958/2024 Date of Hearing:23.10.2024 Date of Decision:23.12.2024 HEMAMBIKA R. PRIYA The present appeal has been filed by M/s Zion Express Cargo Private Limited1 to assail the Order-in-Original No. 33/NLB/Adj/2012 dated 08.11.2012 wherein the Commissioner has confirmed the demand of customs duty amounting to Rs. 50,36,786/- along with interest and appropriate imposition of penalties. 1 The appellant 2 Customs Appeal No. 55889 Of 2013
2. The facts of the case are that the appellant is a Custom House Agent operating under Licence No.R002/88 issued by the Commissioner of Customs (I&G), New Custom House, New Delhi valid up to 2014. The appellant is a regular CHA of the Importer, the last 8 years and has handled several export and import shipments.The department had also granted ACP status to the Importer on the basis of their clean track record.The appellant filed the Bills of Entry, on the basis of import documents and declarations forwarded by the importer and entered description of the goods as Inkjet Printer as per description mentioned in the import invoices issued by the overseas suppliers M/s Creta Print, Spain and M/s Digitile Service Ceramic S.L., Spainand classified the impugned goods under CTH 844332 as per the advice of the Importer and in accordance with the description of the goods. In December 2011, the officers of DRI, Ahmedabad initiated investigations against importer and in the course of investigation summoned Sh. LalitChander Sharma, G card holder and Director of the appellant.In compliance to the summons, Shri LalitChander Sharma appeared before DRI and tendered his voluntary statement. On completion of investigation, the DRI issued a Show Cause Notice No. DRI/AZU/GRU/46/2012 dated 12.06.2012 on the basis of perverse inferences and proposed penalty on the appellant as the appellant had filed the subject Bills of Entry. The appellant submitted its detailed written reply inter alia denying all the allegations made in the show cause notice. The matter was adjudicated and the Commissioner confirmed the imposition of Rs 1 lakh as penalty against the appellant. 3
Customs Appeal No. 55889 Of 2013 Aggrieved by the said order, the appellant has preferred the instant appeal before this Tribunal.
3. Learned counsel for the appellant submitted that in terms of Section 112(a) of the Customs Act, penalty for improper importation of goods is chargeable from any person specified in Clauses (a) and (b) of the said Section. Clause (a) of Section 112 of the Customs Act is reproduced below:
"112. Penalty for improper importation of goods, etc. Any person- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act"
He submitted that it is clear from the above that Section 112(a) of the Customs Act includes two categories of persons, who may be liable for fine. The first category of persons is those who, in relation to any goods, do or omit to do any act which renders the goods liable for confiscation under Section 111 of the Customs Act. The second category of persons comprises of those who abet the doing or omission of such acts. In the present case, penalty has been imposed on the appellant on the allegation that he hadabetted the act of misdeclaration, importation of prohibited goods. The Ld. Counsel further submitted that the use of the expression 'abet' in Section 112(a) of the Customs Act, makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts. A plain meaning of the word 'abet' means instigation, aid, encouragement of an offence. It 4 Customs Appeal No. 55889 Of 2013 necessarily involves the knowledge that the act being abetted is wrong. In support, learned counsel relied upon the following decisions:-
Shree Ram vs. State of U.P2
Amritlakshmi Machine Works vs. The Commissioner of Customs
(Import), Mumbai3
Commissioner of Customs (Import) vs. TrinetraImpex Private
Limited4
Rajeev Khatri vs. Commissioner of Customs (Export)
3.1 Therefore, he submitted that the DRI had failed to show any
justification, no case of abatement by the appellant is established. Ld. Counsel further contended that the issuing authority lacked jurisdiction in issuance of show-cause notice to the appellant. In the above facts and circumstances, learned counsel prayed to decide the appeal on merits and evidences induced already on record.
4. Learned Authorized Representative for the Department submitted that the appellant filed Bills of Entry No. 3967742/2.7.2011 and 4414865/20.8.2011 for M/s Kajaria Ceramics Limited Shri LalitChander Sharma is Director and G-card hold in the said CHA Company. In his statement, Shri Lalit had accepted that they filed Bills of Entry No. 3967742/2.7.2011 and 4414865/20.8.2011 on the basis of import documents provided to him and that he had not received/seen any catalogue/literature. Ld. AR contended that being 2 1975 3 SCC 495 3 2016 (335) ELT 225 4 2020 (372) ELT 332 (Del.) 5 Customs Appeal No. 55889 Of 2013 CHA it was their duty to call for literature and ascertain actual classification of the impugned goods but they did not call for the same. He has also stated that the clearance under Bill of Entry no. 2409364 dated 8.12.2010 was also attended by them. That clearance was under
tariff item 8433990 i.e., on payment of basic customs duty @ 7.5%.Ld. AR submitted that the appellant are regular CHA of M/s Kajaria Ceramics Ltd. for the last 8 years. In the instant case, the said Bill of entry was filed by them in a routine course on the basis of description of goods mentioned in the importinvoices issued by the overseas suppliers. M/s Zion's contention that the impugned machines were classified by M/s Kajaria Ceramics Ltd. under CTH 84433290 and 84433250 and they had not suggested any CTH for these indicates that they had towed the line of their client even though they were aware that the earlier machine was classified under CTH 84433990 by them in respect of Bill of Entry No. 2409364 dated 08.12.2012. They were also aware that a refund claim had been filed.Ld. AR further stated that M/s Zion, CHA was not working independently and judiciously as required by the Customs law. In commercial invoice No. XP 356 dated 11.08.2011, the manufacturer/supplier had mentioned the description of goods as inkjet printer and customs tariff heading No. 84433250. Apparently, by not raising any query regarding nomenclature and classification of the impugned goods, the CHA appears to have shifted their responsibility to the importer. The CHA has experience of more than 20 years in the business of clearance of goods and cannot absolve themselves from theirresponsibility. Since, the mis-declaration resulting in mis-classification is wilful with intent to 6 Customs Appeal No. 55889 Of 2013 evade payment of appropriate duty, the various judicial pronouncements quoted by the appellant do not bar imposition of penalty as the mis-classification is not bonafide. Further, the appellant had failed to discharge their obligation in a fair manner as required under the law. The CHA was not only responsible towards client i.e. importer/exporter but is also required to diligently assist the Customs department, whereas the appellant had failed. Hence, the above acts of omission and commissions of the appellant have resulted in abetment leading to mis-classification of the impugned goods. These deliberate acts on the part of the appellant have rendered the goods liable to confiscation and themselves to penalty. They have also rendered themselves liable to penal action under Custom House Agent Licencing Rules, 2004.
5. Heard the ld. Counsel for the appellant and ld. AR for the Department and perused the case records.
6. The issue before us is whether penalty is liable to be imposed on the appellant, the Customs Broker for misdeclaration found in the goods imported by M/s Kajaria. The admitted facts are as follows:
i. The appellant is a registered Customs Broker in Delhi since 1988.
ii. The appellant regularly filed the Bills of Entry for the importer viz., M/s Kajaria Ceramics for past 8 years.
iii. They have filed the impugned Bills of Entry 7 Customs Appeal No. 55889 Of 2013
7. What needs to be established is whether there was abetment of the appellant in the misdeclaration of the imported goods. It is on record that the statement of Shri GyanPrakashNirmal, Vice President of the importer has never implicated the appellant in the act of alleged misdeclaration of the imported goods. The impugned order vide para 81 categorically places the responsibility of the misdeclaration of the impugned goods on the importer, and specifically on Mr GyanPrakashNirmal, based on the investigations & evidences available with the Department. There is not even a whisper of any advice or action undertaken by the appellant to facilitate or abet the said misdeclaration. There is nothing on record to prove that the appellant had connived/abetted with the importers in filing the Bills of Entry for importing the said products, without the mandatory documents.We also note that the impugned order for the said offence has already penalized the importer in terms of redemption fine and penalty. Hence, we are in agreement with the Ld Counsel that penalty under Section 112(a) can be imposed only if there is evidence of abetment by the appellant.
8. We take support of the Tribunal's decision in the case of M/s. BhanjeeJevathKhona VS The Commissioner of Customs[ 2024 (4) TMI 45
- CESTAT BANGALORE] held as follows:
"9. In view of the above, as there is nothing on record to prove that the appellant had connived/abetted with the importers in filing the documents for importing the restricted products without the mandatory documents, the penalty cannot be sustained. The impugned orders for the said offence have already penalized the 8 Customs Appeal No. 55889 Of 2013 importers in terms of redemption fine and penalty. As held by the Tribunal in the case of G Narayan and Company (supra), since the appellant has not been penalized under the Customs House Agents Licensing Regulations, for any irregularity, the question of imposing penalty under Section 112a of the Customs Act, 1962 does not arise."
9. Similarly, in the case of G Narayan and Company Vs. Commissioner of Customs, Mangalore, [2021-378 ELT 298 (Tri. Bang)] the Tribunal held that:
"6. After considering the submissions of both the parties and on perusal of the record, I find that the Revenue has not been able to bring any evidence on record which shows that the appellant had prior knowledge regarding the violation of the provisions of the Customs Act. Further I find that this Tribunal in its Final Order No. 20523/2019, dated 4-7-2019 reduced the penalties imposed on the passenger after holding that there was no suppression of facts by the passenger. Once the passenger has not suppressed any material fact then how it can be said that the appellant has abetted the passenger in the commission of certain violation of the Customs Act. Further I find that in the case of Triways Transportation Pvt. Ltd. v. Commissioner of Customs, New Delhi - 2018 (363) E.L.T. 1027 (Tri. - Del.) wherein it was held that penalty under Section 112(a) of the Act is not imposable on the CHA when no proceedings are initiated against him under the Customs Brokers Licensing Regulations, 2013. In the present case, no proceedings were initiated against the appellant under the Customs Broker Licensing Regulations, 2013. Moreover, issuance of show cause notice in de novo remand proceedings is not permitted under law. In view of my discussion above, I am of the considered opinion that in the facts and circumstances of the present case, the imposition of penalty of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) on 9 Customs Appeal No. 55889 Of 2013 the appellant is not sustainable in law and therefore I set aside the same by allowing the appeal of the appellant.
10. We note that as there is nothing on record to prove that the appellant had connived/abetted with the importers in filing the documents for importing the restricted products without the mandatory documents, the penalty cannot be sustained. We also note that for the said offence, the importer has already been penalized by imposition of redemption fine and penalty.
11. Consequently, we set-aside the impugned order, and allow the appeal.
(Order pronounced in the open Court on 23.12.2024) (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) G.Y.