2006 (9) TMI 331 - AT - Customs

Summary

Issues:
Imposition of penalty under Section 114 of the Customs Act, 1962 on the appellant for allowing the use of CHA's rubber stamp leading to transportation of concealed foreign currency.

Analysis:

The judgment by the Appellate Tribunal CESTAT, Mumbai, involved the issue of imposing a penalty under Section 114 of the Customs Act, 1962 on the appellant, who was an employee of a Customs House Agent (CHA). The penalty was imposed for allowing another individual to use the CHA's rubber stamp, allegedly leading to the transportation of concealed foreign currency found in a consignment of fresh fruit exported by a particular company. The Commissioner had imposed a penalty of Rs. 50,000 on the appellant for this act.

Upon hearing both sides, the Tribunal noted that although foreign currency was indeed found concealed in the consignment of fruit, the order did not establish how the use of the rubber stamp by the appellant resulted in abetting the transportation of the concealed foreign currency. It was highlighted that the person misusing the rubber stamp was unaware of the concealed foreign currency, indicating that even the individual using the stamp did not know about the currency. Therefore, the Tribunal concluded that there was no way the appellant could have known about the concealed foreign currency, and thus, no direct link was established between the appellant's actions and the transportation of the currency.

Consequently, the Tribunal set aside the impugned order that imposed a penalty on the appellant, as it was deemed that the connection between the appellant allowing the use of the CHA's rubber stamp and the transportation of the concealed foreign currency was not established. The appeal was allowed in favor of the appellant, indicating that the penalty under Section 114 of the Customs Act was unjustified in this particular case. This judgment showcases the importance of establishing a direct link between an individual's actions and the alleged offense before imposing penalties under relevant legal provisions.