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2023 (7) TMI 642 - AT - CustomsLevy of penalty u/s 112(a) of Customs Act - vicarious liability of Pre-Shipment Inspection Agency - Allegation is that appellant's proprietorship firm is lack of diligence or negligence (on the part of its employee, i.e., Mr. Bob in the course of examination of cargo at the time of loading of containers in UK) and not the appellant by itself - HELD THAT:- Shri Bob Inspector was located in London which was at the relevant time not a territory, within the purview of penalty proceedings under Indian Customs Act, 1962, as being a person who commits any omission outside India. However, for the purposes of present proceeding this may not be a relevant consideration as the penal proceedings have been directed against the present appellant in its capacity as an employer for lack of diligence on the part of its employee and itself. The concept of vicarious liability in penal proceedings, is not completely unknown in the Customs Act proceedings, as number of such cases between CHA and its employees have been dealt with under purview of Section 117, which is in the nature of residuary penal provision, and is applicable when no other express penalty provision is available. In the instant case, this Court is concerned with penalty which was initially purposed under Section 112 without quoting any sub-clause. However, same was later confirmed under Section 112(a) of Customs Act, 1962. Nothing has been brought on record as to show, how due diligence on the part of the employer (located miles away, from employee) is lacking, specially when it has prescribed percentage checks provided radiation detecting equipments as has been indicated by the investigation and also employed qualified persons - the invoking of Section 112(a) requires mens rea to be established on record. This Court is of the view that penalty as imposed does not sustain both in law and in the facts of the matter. The appeal is allowed with consequential relief of wavier of penalty under Section 112(a) as imposed - Appeal allowed.
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