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TMI Blog2025 (5) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... consignments. The proprietor and IEC holder of M/s. Jagdamba Enterprises- Sh. Naresh Kumar Jha, met the director of the appellant Sh. Ashok Sharma, in his office along with Sh. Pawan Ralli and sought their services for the clearance of the import consignment in October 2013. Thereafter, the appellant obtained the IEC copy, authority letter, ID proof from Sh. Pawan Kumar Ralli who had visited along with the importer. Sh. Pawan Kumar Ralli was an importer and freight forwarder, who besides M/s. Jagdamba Enterprises, had introduced five to six other importers to the appellant. The appellant cleared eleven consignments of M/s Jagdamba Enterprises prior to the impugned consignment. The appellant filed the Bill of Entry No. 6907998 dated 27.09.2014 on behalf of the importer viz., M/s. Jagdamba Enterprises declaring the items as per the import documents i.e., kids cotton belt, photo frame, candle stand glass, scrubber, scales. However, on examination of the goods, some undeclared goods as well some the declared goods in varying quantities were found. Consequently, the container was detained on 01.10.2014 and vide seizure memo dated 23.01.2015, the goods were seized. Subsequently the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y fresh material or evidence which could justify the imposition of penalty under Section 114AA of the Customs Act, 1962.Learned counsel went on to state that the adjudicating authority had failed to appreciate that in the absence of charge of aiding and abetting, even the penalty under Section 112 (a) of the Customs Act, 1962 could not have been imposed. Learned counsel stated that the adjudicating authority had failed to appreciate that it was the appellant who had challenged the order dated 29.08.2017 since the penalty which was imposed was in excess of provision of Section 112 (b) (ii) of the Customs Act, 1962. 3.1. Learned counsel contended that the High Court had passed categorical direction that only the issue of penalty and the sections/ provisions applicable would have to be examined afresh. Learned counsel stated that the physical verification of the premises of the importer or firm are neither mandated under the CBLR, 2013 nor the circular dealing with the KYC norms to be followed by the Customs Broker indicates such procedure. He submitted that the Tribunal in the matter of M/s. Setwin Shipping Agency Vs. Commissioner of Customs (General) Mumbai 2010 (250) ELT 141 (Tri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid findings, there was no justifiable reason to impose the penalties under Section 112(a) of the Customs Act, 1962. 3.4 Similarly, the Tribunal in the case of R.P. Sethi Vs. Commissioner of Customs, New Delhi 2002 (140) E.L.T. 482 (Tri. Del.) held as under: "5.2 For a penalty under Clause (b) of Section 112, the person sought to be penalized must have possessed, carried, removed, deposited, harboured, kept, concealed, sold, purchased or otherwise dealt with, any import goods which, to his knowledge or belief, are liable to confiscation under Section 111. In the instant case, there was no allegation involving any of the ingredients of Section 112, against R.P. Sethi. On the other hand, the SCN connected him with the proposal for confiscation of the books under Section 119. Therefore the very proposal for imposing penalty on him under Section 112 was unwarranted. Further, the Commissioner in his order appears to have invoked Sections 112(a) and (b) against R.P. Sethi on the basis of a finding that he had failed to discharge his responsibility as a CHA. This finding, as rightly submitted by Counsel, is beyond the scope of the SCN. If a CHA commits, or omits to do, som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tradiction in the appellant's stand. On one hand, he claimed that the fraud was committed by Sh. Pawan Kumar Ralli and Shri Naresh Kumar Jha and on the other hand he claimed that he had obtained both authorization required under Regulation 10(a) and KYC required under Regulation 10(n) from Shri Pawan Kumar Ralli. However, the appellant could not provide all the authorization during the investigations, hence, learned authorized representative submitted that it was evident that he was in connivance with Sh. Pawan Kumar Ralli and the importer in the mis-declaration of goods. Since, there was gross undervaluation and mis-declaration and CB had filed such Bills of Entry for monetary gain, hence, he was liable for penalty under section 112(a) and 114AA. 4.2. Learned authorized representative further contended that the appellant being the licensed, and authorized under the Custom Broker Licensing Regulation 2018 was required to undertake the work of clearance of consignments on behalf of his clients (importer/exporter) in the manner as prescribed. He stated that both the Directors of appellant had admitted in their statements that they had only caused the verification of the documents an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962. 7. In terms of Section 112(a) of the Customs Act, penalty for improper importation of goods is chargeable from any person specified in Clauses (a) and (b) of the said Section. For the purposes of the present controversy, Clause (a) of Section 112 of the Customs Act is relevant and is reproduced below: "112. Penalty for improper importation of goods, etc. Any person-(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act" 8. It is clear from the above that Section 112(a) of the Customs Act includes two categories of persons, who may be liable for fine. The first category of persons are those who, in relation to any goods, do or omit to do any act which renders the goods liable for confiscation under Section 111 of the Customs Act. The second category of persons comprises of those who abet the doing or omission of such acts. In the present case, penalty has been imposed on the appellant on the allegation that he had abetted the act of misdeclaration of the imported goods. However, we note that the appellant had been regularly filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge would not amount to abetting an offence. Parliament has specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person - (a) who in relation to any goods does or omits to do any act ...." would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a half as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty." 10.1 In the instant case, it is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was set-aside by the Tribunal vide its Final Order No. 50532 of 2019 dated 10.04.2019. The relevant paras of the said order is reproduced hereinafter:- "7. After hearing both the sides and perusing the record of the appeal, we find that so far as the compliance of the Regulation 11 (a) of CBLR is concerned which provides that Customs Broker shall obtain the authorization from each of the companies, firms or individuals with whom he is for the time being employed as Customs Broker and produce authorization whenever required of Deputy Commissioner of Customs or Assistant Commissioner as the case may be. In this regard, we find that the appellants had not only taken the appropriate authorization from the importer, namely M/s. Jagdamba Enterprises but all the KYC documents such as IEC registration copy, authority letter, ID proof, PAN card etc. It is also matter of record that when the investigating agency has recorded statement of Shri Ashok Sharma on 26.11.2014 and Shri Prakash Chand Sharma on 10.02.2015, they have produced a copy of KYC submitted by M/s. Jagdamba Enterprises which included copy of Bill of Entry, copy of IEC Code Number, authorization letter to the investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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