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TMI Blog2021 (12) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumari Coir Products for alleged export of cargo declared to have been containing "Coco Peat" to Malaysia and one S.Chandrasekhar was the proprietor of M/s.Kumari Coir Products. On a specific information gathered by the Directorate of Revenue Intelligence [D.R.I.] that red sanders logs were smuggled out of India, the said container was immediately recalled. However, the container, which had already sailed to Malaysia on 14.07.2008, was examined at Malaysian Port and found stuffed with Red Sanders and therefore, it was sent back to Tuticorin. The same reached Tuticorin Port on 10.08.2008. On enquiry, it was found that one George, had played the vital role in the illicit export of the prohibited goods with the assistance of M/s.Kumari Coir Products and its Proprietor, namely, S.Chandrasekhar, thereby, the Import and Export code of M/s.Kumari Coir Products was allowed to be used by the said George. It was further found that one Muthu, who is a Manager-cum-Driver of the lorry bearing Reg.No.TN-23-0420, on his way to Tuticorin Port Trust, had replaced the cargo with red sander woods. The enquiry conducted revealed the act that shipping bill was prepared in Custom House by one R.Sivarama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Section 50(2) and 114 of the Customs Act, 1962. The order of the Commissioner of Customs is a cryptic order without discussing the legal issues. The grounds raised by the appellant were not properly meted out by the authorities. When there was a specific finding regarding substitution of the goods by George and Muthu, the appellant, who is an employee of the Customs House Agent cannot be suspected or faulted for the said substitution. As an employee of the Customs House Agent, the appellant has nothing to do with the goods and is only concerned with the documentation of the export. While the shipping bill was duly signed by the Exporter and certified by the Superintendent of Central Excise, for the contents of the container, the employee of the Customs House Agent cannot be found guilty of abetting the crime contrary to the legal position settled by Supreme Court in Sri Ram vs. State of U.P., 1975 SC 175 and Trilok Chand Jain vs. State of Delhi, 1977 SC 666. Therefore, when there is no element of mens rea, the penalty imposed on him is arbitrary. For the mis-declaration or substitution of the goods in the course of transit, the Customs House Agent or its employee cannot be hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a declaration as to the truth of its contents. 11. Section 114(i) of the Customs Act, 1962 reads as below:- 114.Penalty for attempt to export goods improperly, etc.- (ii) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act, whichever is the greater;-- 12. In these cases, several substantial questions of law have been raised by the appellant herein. It is seen that the provisions of the Customs House Agents Licensing Regulations, 2004 are nothing, but supporting legislation passed in exercise of the powers conferred by sub-section 2 of Section 146 of the Customs Act, 1962. The role and responsibility of the Customs House Agent in case of mis-declaration of goods has to be dealt with based on the mens rea to the contribution of the Customs House Agent allowing the smugglers to misuse the licence issued to him. 13. A Division Bench of this Court in almost identical facts of the case in K.V.Prabhakaran Vs. Commissioner of Customs, Chennai reported in 2019 (365) E.L.T. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Employee can be initiated only as per the procedure under CHALR 2004 and not under Sections 114(i) or 117 of the of the Customs Act or the provisions of Customs Act does not apply and both are baseless argument. Regulation No.12 of CHALR 2004 contemplates that the licence is not transferable or sold. Thus, while granting licence, it is very clear that the licensee cannot allow the third party to misuse the licence. Regulation No.13 of CHALR imposed certain obligations on the Customs House Agent and one such obligation is to exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage and yet another obligation is to verify antecedent, correctness of Importer Exporter Code (IEC) Number, identity of this client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. 17. From the records and the admission of the appellant and his Employer, it is clear that the appellant had not discharged these obligations, which cast on him. It is a case where under the guise of Coco Peats, prohibited goods namely, Red ..... X X X X Extracts X X X X X X X X Extracts X X X X
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