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2015 (12) TMI 1149 - HC - CustomsLevy of penalty on CHA / agent, broker - Import of high end luxury cars from various foreign suppliers by mis-declaring as new - Undervaluation of goods - Imposition of penalty under sections 112(a) and 114AA of Customs Act, 1962 - Demand of differential duty - Held that:- Court noted that the CCIG proceeded to adjudicate the SCN in question, as far as Respondent No. 1 is concerned, without recording the statement of anyone on behalf of Respondent No. 1. Further Respondent No. 1 was not confronted with the statement made by Mr. G.S. Prince. As rightly pointed out by Mr. Sanjay Kantawala, learned counsel for Respondent No. 1, there was no evidence to show that Respondent No. 1 was aware of the acts of his agent, Mr. Prince, as far as clearance of the car in question was concerned. Sections 112 (a) and 114AA of the Act are penal in nature. Therefore, in the absence of some tangible material to show that the illegal import was with the knowledge of Respondent No. 1, no penalty can be imposed on Respondent No.1. - There was no finding, based on the evidence on record, that Respondent No. 1 was aware of the illegal import in which the G-card holder was involved. Considering that it was a question of penalty, there ought to have been some tangible material to show that Respondent No. 1 was aware of the acts of its employee/agent, Mr. Prince. As rightly pointed out, if Respondent No. 1 was found to have acted in breach of Regulation 19 (8) of CHALR 2004, that might call for a separate action to be initiated under those regulations. However, that by itself will not justify the imposition of penalty under Sections 112 and 114AA of the Act unless knowledge of the illegal acts of the agent/employee is able to be attributed to his employer/principal, i.e. Respondent No.1. Registration certificate of the car obtained by the First Secretary (Trade), High Commission of India, London (UK) was produced before the Appellant. The car was imported into India through M/s. A.K. International and cleared through customs on 4th April 2008 on payment of duty on the basis that it was a new car. It was ultimately sold to Respondent No. 2 on 21st April 2008. The CCIG sought to place the onus on Respondent No. 2 to show how the prior registration in UK, though stated for the purpose of onward sale to India, “has helped the transport authorities of UK for allowing the export of the impugned car.” There was no warrant for shifting the burden to prove the negative to Respondent No.2 unless the Department had discharged the primary onus of showing the involvement and knowledge of Respondent No.2 in the illegal import of the car in question. - deletion by the CESTAT of the penalty imposed on Respondent No. 2 cannot be faulted. The reduction of the redemption fine also does not call for interference - No substantial question of law arises - Decided against Revenue.
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