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2024 (1) TMI 682 - AT - CustomsLevy of penalty u/s 114(i) of the Customs Act - smuggling - red sander woods logs of Nepal Origin - omission or the commissioning of action/act, performed/non-performed by the present appellant - HELD THAT:- It be noted that in terms of the obligations under the CHALR, no case remains any further in view of the said proceedings, having attained finality. It is the expressly incumbent on the department to have pointed out the role played by the individual/appellant herein for imposition of penalty on them under Section 114(i) of the Customs Act - it is also noted that there is no finding by the adjudicating authority to indicate any beneficial consideration having been passed on to the appellant by way of a monetary reward or otherwise for his assumed role for which the appellant has been penalised by the adjudicating authority. There is nothing to impute by way of a categorical assertion the conspiring of, or an express omission or commission, leading to the fraud on the part of the appellant. There is nothing in the findings of the learned Commissioner to assert a positive role or to impute abetment on the part of the appellant in the attempt to smuggle out Red Sanders. Thus, in view of anything specific on the part of the appellant being brought out on record, it would be completely inappropriate to subject the appellant to penal provisions under Section 114(i). The fact that in so far as this Custom Brokerage firm was concerned, Tribunal has categorically held that though the appellant was found wanting in discharge of his obligations under Regulation 13 (a), (b) and (o) of CBLR, 2004, they cannot be penalized in perpetuity and though had accordingly upheld the order of the learned Adjudicating Authority issued under Regulation 20(1) of the CBLR, it had however restored the same. The order passed by the adjudicating authority is based largely on conjectures and assumptions. It is also noted that in respect of Nepal origin exports to third countries transiting through India, the Indian CHA’s function is limited to processing the Border endorsed CTD at Customs House, Kolkata, taking the EF no. and to get the seals on the containers inspected and to take “allow” order from Customs for export through Kolkata port. In the instant case, we find that the appellant did not have any chance to verify the seal of the containers before interception by the DRI and to inform the Customs accordingly. Further, as stated above it is not within the express scope of activities of the CHA to escort the consignment from the Indo-Nepal border and oversee physical transit of the cargo or for any acts of omission/commission of the transporter/freight forwarder as alleged. The learned Adjudicating Authority erred in not appreciating that the export documents in respect of the Nepalese export consignment were received from the Nepalese exporter. Also it is not in the scope/mandate of the CHA firm or his representative to collect KYC of transporter or freight forwarder or other intermediaries. It is settled law that for imposition of penalty, it is necessary to establish a positive role on the part of the concerned person or the establishment of mens rea on part of such a person is a must. Vague allegations and negligence, if any, howsoever grave cannot be assumed to mean abetment so as to invoke penal action. For any penal action to be enforced, the establishment of an active role on the part of the accused is imperative. The departments case falls woefully short of substantiating the invocation of penalty under Section 114(i) of the Customs Act. The impugned order is liable to be set aside - Appeal allowed.
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