TMI Blog2023 (1) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... The department has failed to establish the allegations raised against the appellants. The penalties imposed therefore require to be set aside - Appeal allowed. The allegation is that the goods have been misdeclared. Though the adjudicating authority has absolutely confiscated goods under Annexure II, the reason for such confiscation is that the goods have violated IPR / BIS Rules. In regard to goods imported under Annexure I and III, the adjudicating authority has given an option to the importer to redeem the goods on payment of redemption fine. The appellant who is a Customs Broker cannot be expected to have knowledge about the goods in the container - On such circumstance, when there is no dispute with regard to the KYC documents submitted on behalf of the importer, the penalty imposed under sec. 112(a) alleging that the appellant has abetted smuggling of misdeclared / undeclared goods is without any factual basis. The penalty imposed on the appellants alleging abetment, that they have rendered the goods liable for confiscation, is totally unwarranted. The penalty imposed on the appellants require to be set aside - Appeal allowed. - Customs Appeal No.40401 and 40402 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listed in Annexure III valued at Rs.39,62,618/- was also ordered to be confiscated with an option to the importer to redeem the same on payment of redemption fine of Rs. 4 lakhs. 4. The Adjudicating Authority also imposed penalties on various parties. A penalty of Rs.10 lakhs was imposed on Shri Hari Prabhu (Appellant in C/40102/2021) under sec. 112(a) and penalty of Rs. 20 lakhs was imposed under sec. 114AA of the Customs Act, 1962. The adjudicating authority imposed a penalty of Rs. 10 lakhs on Thirumalai Thiyagarajan (appellant in Appeal No. C/40401/2021) under sec. 112(a) of the Customs Act, 1962 and penalty of Rs.10 lakhs under sec. 114AA. Penalty of Rs. 2 lakhs was imposed on Southern Clearing and Forwarding Pvt. Ltd. (appellant in Appeal No. C/40065/2022) who is a Customs Broker who dealt with the fling of Bill of Entry. Penalty of Rs. One lakh was also imposed on Mrs. J. Lakshmi, Director and Authorized Signatory of the Customs Broker firm (appellant in Appeal No. C/40064/2022). 5. Against the above order and the penalties imposed, the appellants filed appeals before the Commissioner (Appeals) who vide the order impugned herein dismissed the appeals. Hence the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainers under six bills of entry including the impugned bill of entry. He had given statement that the appellant Shri Hari Prabhu had asked him to take delivery of the container and arranged transportation through Mahesh. On the basis of such statement, the appellant has been brought into the picture alleging illegal removal of the container from CFS and forging documents for the purpose of clearance of the goods. 7. The learned counsel submitted that Karthikeyan is also a co-noticee in the present case and the statement of a co-noticee cannot be relied upon to impose penalty without corroboration with other independent evidence. The learned counsel pointed out that though as per the records of the department, the container is said to have been removed on 29.9.2017 from CFS area, as per the statement given by Karthikeyan, the appellant is said to have given the document for clearance to Karthikeyan only on 23.10.2017. This contradiction itself would show that the case put forward by the department is concocted one. When the container is said to have been removed in September 2017, the allegation that the appellant forged documents for removal of container and clearance of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a for holding the accused guilty unless corroborated by other independent evidence. He added that the Hon'ble Courts in different cases have held that however grave the suspicion may be, it cannot take the place of proof. The decision of the Tribunal in Commissioner of Customs Vs. Sri Krishna Sound and Lights reported in 2019 (370) ELT 594 was relied to argue that penalty under sec. 114AA cannot be imposed in regard to imports. He prayed that the appeals may be allowed. 12. The learned AR Ms. G. Anandalakshmi appeared and argued for the department. She submitted that the appellant Hari Prabhu vide his statement dated 19.3.2018 has deposed that he knew Mahesh, Ashok Kumar Jain and Karthikeyan all of whom were involved in the activity of illegal removal of the containers and the clearance of goods. From their statements, it is clear that Hari Prabhu handed over the document through his staff Sri Ramesh which was collected by Sri Mahesh. Along with Mahesh one Prabhu (Prabhakar) went to Continental II CFS and took illegal delivery of the container and handed it over to the transporter. The appellant shri Hari Prabhu had forged the documents which were presented for clearance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The documents are filed on the basis of the information / document given by the importer. When the KYC documents are proper, the penalty imposed on the appellant under sec. 112(a) alleging that appellant has abetted misdeclaration of goods cannot sustain. Further, the appellant Ms. J. Lakshmi has been implicated in the proceedings only because she is the Director and authorized signatory of the Customs Broker firm. There is no allegation that she was involved in any manner on importing alleged goods or removal of the container from the CFS station. It is to be noted that the goods which were confiscated as per Annexure I and III were later cleared to the importer A.K. Imports and Exports on payment of redemption fine. Further, the reason for absolutely confiscating the goods in Annexure II is that the goods violated IPR and BIS Rules. The appellant who is a Customs Broker cannot be expected to know such details of the goods imported. He relied upon the decision in the case of Poonia Brothers Vs. Commissioner of Customs, Jaipur reported in 2019 (370) ELT 1074 (Tri. Del.) to argue that the CBLR 2013 Regulations does not state that the Customs Broker is required to physically ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has arranged for the forged OOC documents and has tried to remove the container from the Customs Area without proper permission, hereby called upon to show cause to the Commissioner of Customs, Chennai-II Commissionerate, Custom House, Chennai-600001, within 30 days of receipt of this notice as to why- I. Penalty under Section 112 (a) of the Customs Act, 1962 should not be imposed on you for rendering the goods liable for confiscation. II. Penalty under Section 114AA of the Customs Act, 1962 should not be imposed on him for submitting forged documents in respect of the imported goods before Customs. 42. Further Shri Thirumalai Thiagaran has arranged for the forged OOC documents and has tried to remove the container from the Customs Area without proper permission, hereby called upon to show cause to the Commissioner of Customs, Chennai-II Commissionerate, Custom House, Chennai-600001, within 30 days of receipt of this notice as to why- III. Penalty under Section 112(a) of the Customs Act, 1962 should not be imposed on you for rendering the goods liable for confiscation. IV. Penalty under Section 114AA of the Customs Act, 1962 should not by imposed on him for submitti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant in alleging misdeclaration of goods. The relevant portion of the order is as under:- 4. Heard both the sides and perused_ the records of the cases. We find that penalty of Rs. 10,00,000/-, Rs. 20,00,000/- and Rs. 10,00,000/- has been imposed on the Appellant. In going through the Order-in-Original the role of Appellant was shown to be the main person behind the whole case and that is based on the statement of Shri Pansare who had claimed before the CHA that he has taken up with Shri C.R. Shukla and the statement of Shri Anwar saying that he had financial dealing with M/s. Gaylord Impex one of the importer and the fact that there are some call records showing conversation between the person involved, other than this no evidence has been brought to justify the imposition of penalty to Shri R. C. Shukla. It has not been brought out as to the exact role he played in rendering the case liable for confiscation in the Show Cause Notice nor the adjudicating authority conclude that he would have been benefited in any manner had the import been through. He understandably [held that] the revenue cannot conclude with a clinical precision. However the case cannot be built on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department alleges that the appellant Shri Hari Prabhu had handed over the documents on 23.10.2017 in order to remove the container from CFS area. However, according to the department, the container was removed on the basis of such documents on 29.9.2017. Further, as per para 32 of the Order in Original, the statement given by U. Mahesh shows that the date of removal of the container is 14.8.2017. Thus, there is much contradiction as to the dates on which the container was removed. The investigation of the removal of this container was taken up along with alleged illegal removal of containers in respect of five other bills of entry. However, the date of removal of the container of this case is not satisfactorily established. I am able to see that apart from the statement of Shri Karthikeyan, there is nothing to establish that the appellant had any role in forging documents or removing the container from the CFS area. The contradiction pointed out by the learned counsel also shakes the case put up by the department. 23. From the discussions made above, I have to hold that the department has failed to establish the allegations raised against the appellants. The penalties imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n misdeclared. Though the adjudicating authority has absolutely confiscated goods under Annexure II, the reason for such confiscation is that the goods have violated IPR / BIS Rules. In regard to goods imported under Annexure I and III, the adjudicating authority has given an option to the importer to redeem the goods on payment of redemption fine. The appellant who is a Customs Broker cannot be expected to have knowledge about the goods in the container. On such circumstance, when there is no dispute with regard to the KYC documents submitted on behalf of the importer, the penalty imposed under sec. 112(a) alleging that the appellant has abetted smuggling of misdeclared / undeclared goods is without any factual basis. The learned counsel has relied on the decision in the case of Trade Wings Logistics Pvt. Ltd. (supra). The Tribunal had observed as under:- 6. As per the impugned order, the licence of the customs broker/appellant has been suspended indefinitely as it states that suspension order should continue until further orders. In the earlier order of suspension dated 10-11-2017, it is brought out that statements of various persons including Shri M. Jayakumar who is allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBLR 2013 / CBLR 2018. 6. So, we find that obtaining the business through the acquaintance of their employee is not offence under the CBLR. Regarding the use of another person s IEC by the appellant. It is evident at the first instance that the same was not within the knowledge of the appellant and, therefore, he cannot be held responsible for that. But even otherwise, it has been held in the case of M/s. Necko Freight Forwarders Ltd. (supra) that lending of IEC is not an offence under the Customs Act. Therefore, the appellant can also not be held to be liable for this charge which in any case is not sustainable against the appellant. We also find in this case the proceeding has initiated against the appellant on 20-8-2014 and final order was passed on 2-2-2016 which is much more than the prescribed period of nine month under the CBLR. It has been held in many decisions such as Necko Freight Forwarders Ltd. (supra), Innovative Cargo Services (supra) and many others. Therefore, the entire proceeding is time barred and the impugned order is liable to be set aside on this ground alone. The appellant has also taken due precaution to verify the antecedent of the importer so as to ..... 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