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2018 (9) TMI 1293 - HC - CustomsPenalty u/s 114 of CA - failure to comply Public Notice No. 17/2- 12 dated 2.3.2012 issued by the Commissioner of Customs, Jawaharlal Nehru Customs House, Nhava Sheva - Smuggling of Red Sanders. Held that - Regulation 2009 clearly states that these Regulations apply to customs cargo service provider. Regulation 2(b) of the Regulation defines customs cargo service provider to mean any person engaged in receipt, storage, delivery, despatch or otherwise handling imported and exported goods. Regulation 5 of the Regulation provides the conditions which have to be fulfilled by the Customs Cargo Service Provider within the meaning of which the Appellants undeniably falls. In fact, it provides that Customs Cargo Service provider will meet such conditions as required by the Commissioner of Customs (Exports) inter alia in case of export cargo. Thus, the source of power to issue said Public Notice is found in the Regulation which is issued under the Act. Thus in view of the above self evident position the question as proposed does not give any rise substantial question of law. Thus not entertained.
Issues:
Appeal challenging penalty under Section 114 of the Customs Act, 1962 for non-compliance with Public Notice; Interpretation of Public Notice issuance authority under Customs Act. Analysis: Issue 1: Penalty under Section 114 for non-compliance with Public Notice The Appellants, engaged in Freight Forwarding, contested imposition of penalty under Section 114 of the Customs Act for failure to comply with Public Notice No. 17/2-12 dated 2.3.2012. The Tribunal held the Appellants bound by the Public Notice, requiring adherence to Know Your Customer (KYC) norms. The Appellants argued that the Public Notice lacked legal basis as it was not issued under any statutory provision of the Act. The Respondent cited Regulations requiring Customs Cargo Service providers to fulfill conditions specified by the Commissioner of Customs, supported by Circular No.9 of 2010 mandating KYC norms for Customs House Agents. The Appellants contended that the Public Notice extended KYC norms to Freight Forwarders, contrary to Circular provisions. The Court found the Regulations applicable to Customs Cargo Service providers, including the Appellants, and upheld the Public Notice's validity under the Act, dismissing the challenge. Issue 2: Interpretation of Public Notice issuance authority The Court addressed the source of power for issuing the Public Notice, emphasizing its alignment with the Regulations under the Act. The Regulations defined Customs Cargo Service providers and mandated compliance with conditions set by the Commissioner of Customs for export cargo handling. As the Appellants fell under this definition, the Court concluded that the Public Notice's authority stemmed from the Regulations issued under the Act. Consequently, the Court rejected the argument questioning the legal basis of the Public Notice, affirming its validity. Both Appeals were admitted based on the substantial question of law regarding penalty imposition and compliance with the Public Notice, with the Respondent waiving service in both cases. This judgment clarifies the obligation of Customs Cargo Service providers, including Freight Forwarders, to adhere to Public Notices issued under Regulations specified by the Commissioner of Customs. It underscores the legal basis of such Notices and upholds penalties under the Customs Act for non-compliance. The Court's interpretation reaffirms the regulatory framework governing cargo handling and reinforces the importance of following prescribed norms to prevent illegal activities like smuggling.
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