2020 (6) TMI 263 - Customs

Head Note / Extract:
Imposition of penalty u/s 112(a) of the Customs Act - Charge of abatement - Connivance between the employee of the CHA and importer - Illegal Import - prohibited goods - Import of the undeclared goods namely R-22 Gas Cylinders and Salaam Mishri - HELD THAT:- The lapses on the part of the appellant can at worst be termed as negligence in discharge of his obligations under the CBLR. However, the Revenue has failed to adduce any evidence of deliberate involvement or connivance of the appellant in the mis-declaration. Therefore, the charge of abetment on part of the appellant to render the goods liable to confiscation is unsustainable. Thus, the appellant is not liable to penalty under Section 112 (a) of the Customs Act, 1962. Secondly, on the basis of aforementioned findings, which are self-contradictory, inasmuch as the appellant has been charged of not knowing the importer/proprietor and at the same time has been alleged to have aided /abetted the importer in his wrong doings. It is a matter of ordinary prudence that one cannot connive with a person he does not know or has not met. Further, the appellant, as the employee of the CHA firm, G-Card Holder, has only filed the bill of entry on the basis of the documents received by him from the representative of the importer. There is no allegation of forging or manipulation of any documents by the appellant. Further, there is no case or allegation that the appellant knowingly made wrong declaration in the bills of entry on behalf of the importer. Further, there is no statement by any co-noticee or other person suggesting connivance or knowledge of any mis-declaration on the part of this appellant - It is inappropriate interpretation on the part of the Adjudicating Authority that under Regulation 11 (n) of CBLR, it is required to make physical verification of his clients address, IEC No. and other KYC documents. The appellant-CHA firm had known the said Shri Deepak Kapoor - Intermediary, who was bringing them the clearance work on regular basis. Further, the said Shri Deepak Kapoor was also known to Mr. Narinder Narula, Proprietor of the CHA firm. The appellant, being employee of the CHA firm, placed great reliance on Mr. Kapoor and thus, was negligent in ensuring the KYC compliance - Further, the appellant under the influence of Mr. Deepak Kapoor, filed the bills of entry without completing the KYC formalities. Further, from the appreciation of the facts and on perusal of the impugned order, it is evident that no case of connivance is made out against the appellant /employee i.e. no allegation or finding of any additional gain or reward received by him. The penalty imposed is very high and disproportionate to the offence by this appellant. Accordingly, the penalty imposed under Section 112(a) of the Customs Act is reduced from ₹ 34,14,020/- to ₹ 10,00,000/- - Appeal allowed in part.