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Leadking Sea Air Forwarders Pvt. Ltd. Versus Commissioner of Customs and Service Tax, Bangalore

2017 (10) TMI 764 - CESTAT BANGALORE

Penalty on CHA u/s 114(i) and 114 AA of the CA, 1962 - abetting with the exporters to clandestine export of their product - it was alleged that the main appellant herein being a CHA has not verified the antecedent of the exporters who sought to export Ketamine Hydrochloride in the guise of garments but did not notice it was concealed inside the said consignment which was detected after the Customs investigation and based on information - Held that: - when the adjudicating authority himself has a .....

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where it was held that provisions of Customs Act cannot be applied for in case of there being no finding as to the role attributable to appellants - appeal allowed - decided in favor of appellant. - C/920/2012-SM, C/1063/2012-SM - 22297-22298/2017 - Dated:- 26-9-2017 - Shri M. V. Ravindran, Judicial Member Shri Pradyumna G.H., Advocate For the Appellant Shri N. Jagadish, Superintendent (AR) For the Respondent ORDER Per : M. V. Ravindran These two appeals are disposed of by a common order since .....

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hat M/s. Leadking Sea Air Forwarders Pvt. Ltd. being a CHA has to be penalized under the provisions of Section 114(i) and 114 AA of the Customs Act, 1962 and Shri Rajesh being Manager of the said company needs to be penalized under the same provisions. 4. The relevant facts, that arise for consideration herein are the allegations in the show-cause notice indicate that the main appellant herein being a CHA has not verified the antecedent of the exporters who sought to export Ketamine Hydrochlorid .....

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lties on them which is contested. 5. Learned counsel appearing for both the appellants took me through the findings recorded by the adjudicating authority in paragraph Nos. 44 and 45 of the order impugned. It is his submission that the findings recorded do not indicate that the adjudicating authority has come to the conclusion whether there was violation on the part of the appellant which rendered the goods liable for confiscation under Section 113 of the Customs Act, 1962 or otherwise. He would .....

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the very same paragraph wherein the adjudicating authority has recorded the findings. He submits that the main appellant CHA never checked the antecedent of the exporters and more so when the said exporters, only checking of the correctness of import export code does not mean the proper checking has been done and he should have been more vigilant as to find out whether the exporters were functioning from the declared address or otherwise. 7. After considering the submissions made by both sides a .....

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. As regards M/s. Leadking Sea Air Forwarders Pvt. Ltd., the show-cause notice alleged that they had undertaken the CHA work without exercising adequate caution, without causing necessary verification and without employing due diligence and used false and incorrect material and thus abetted the attempt to smuggle out ketamine hydrochloride. The CHA maintained that they had verified IE Code and AD code and then taken up the work of processing of export documentation. As per Rule 13(o) of CHALR, 2 .....

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xporter at the declared address. There appears no such attempt was made even after they attended about seven consignments. This failure of CHA, has led to the fraudsters to smuggle the contraband. Immediately after the contraband was seized in respect of the consignment cleared by the CHA, this office has prohibited operation of their licence and the parent Commissionerate where their Original Licence is registered have been informed to take necessary action and accordingly their licence has bee .....

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he was attending the export consignments of M/s. Sandhya Impex. Apart from Regulation 13(o) of CHALR, as per Regulation 13(d) the CHA has to advise his client to comply with Customs Act and in case of non-compliance bring it out to the notice of Deputy Commissioner of Customs. This has clearly not been done by the CHA. As per Regulation 13(e) CHA has to exercise due diligence to ascertain the correctness of any information which he imparts to a client. In this case the CHA has accepted document .....

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45. Regarding Mr. Rajesh of M/s. Leadking, I find that he knew Mr. Satish of Nayak Aviation personally and even though he found the consignment suspicious, ignored the same and accepted the consignment of export. He knew that the goods RMG gets drawback of customs duty and yet accepted the goods under Free Shipping Bill, in case of which goods are not checked by customs. I find that as a CHA employee he has failed to exercise due diligence in verifying the antecedents of the exporter, accepted d .....

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ty himself has abandoned the allegations in the show-cause notice for the violation of the Customs Act 1962, there being absence of evidence which indicate that appellant had a role, which is tantamounts to abettment in export of goods which are liable for confiscation, penalties imposed on these appellants are liable to be set aside. I find that this is the ratio which is recorded by the Tribunal in the case of Sarosh Nagarwala Skylark Travels Pvt. Ltd. (supra) wherein in paragraph 6 the Bench .....

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House Agents Licencing Regulations, 2004 and it successor Regulations. These are framed by the Central Board of Excise & Customs in exercise of powers under section 146 of Customs Act, 1962. The enabling provision in the statute also empowers the notifying authority to incorporate penalty measure and procedure to be followed for imposition of penalties. When a statutory instrument specifically provides for a code of conduct and penalty for breach thereof, it is not legal and proper to bring .....

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