At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Bangalore
By, THE HONORABLE JUSTICE: M.V. RAVINDRAN
For Petitioner: N.D. George, Advocate And For Respondents: Naveen Kushalappa, AR
1. All these appeals are taken up together for disposal by a common order, as the issue involved is common and in respect of different importers.
2. None appeared on behalf of the appellants despite notice. Advocate on record has filed written submissions in respect of all the appeals. The same is taken on record.
3. Learned DR submits that the issue involved in these cases is regarding imposition of penalties on all these appellants under Section 112(a) of the Cu
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stoms Act, 1962. He draws my attention to the findings recorded by the adjudicating authority. It is the submission that all the appellants herein were Clearing House Agents (CHA) and were permitted to work so, by the respective Commissionerate. He would submit that the statements recorded by the various persons indicate that the appellants herein being CHA manipulated the Shipping House Bill of Lading showing terms of freight from prepaid to freight to be collected which has resulted in undervaluation of the goods imported and consequent discharge of customs duty. He would submit that both the authorities have clearly recorded that the appellants herein had in fact abetted for the lower discharge of customs duty by indulging in such undervaluation by not including the freight in the assessable value.
4. The written submissions of the learned counsel on record draws my attention to the fact that penalties are not imposable under Section 112(a) of the Customs Act, 1962 inasmuch the role attributed to CHA does not indicate that they had abetted the act of undervaluation; that the importer has himself accepted and admitted that there was mistake on their part and discharged the differential duty along with interest and paid 25% amount of duty as penalty as provided under Section 28(6) of the Customs Act, 1962. He would rely upon the decision of the Tribunal in the case of Adani Wilmar Ltd.: 2015 (330) ELT 549; and Commissioner of Customs (II) Airport Special Cargo, Mumbai vs. Samir Vora : 2015 (330) ELT 609 (Tri.-Mum.) for non-imposition of personal penalty under Section 114 of Customs Act, 1962.
5. On a careful consideration of the submissions made, I find that the penalties imposed on the appellants under provisions of Sections 112(a) seems to be unwarranted as the findings of the first appellate authority on appeals filed before her are as under:
I find that the importer has categorically admitted their mistake and have paid the differential duty, interest and 25% of the duty as penalty under Section 28(6) within one month from the date of issue of notice and this fact has been accepted by the Revenue. According to the above provision, once the amount as stipulated has been paid within the prescribed time limit, proceedings against the importer and other co-noticees shall be deemed to be conclusive as to the matters stated therein. It is thus clear that as per this deeming provision, the proceedings against the importer have come to an end. The next question is whether the liability of the co-noticees shall also be deemed to be conclusive when the proceedings against the importer have been conclusive. As per clarification provided under CBEC Circular No. 11/2016-Cutoms, in cases involving seizure of goods under Section 110 of the Customs Act, 1962 or cases where confiscation provisions under Section 111, 113, 115, 118, 119, 120 and 121 of the Customs Act are invoked, the deeming provision as to the liability of the co-noticees shall not apply since Section 28(6) of the Customs Act, 1962 applies only in cases of amount short-levied, not levied or erroneously refunded. Since the present case involves the confiscation of goods under Section 111 of the Customs Act, 1962, I am of the view that the liability of the co-noticees shall not be deemed to be conclusive and the order imposing penalty on the appellant is proper and commensurate with the offence committed. Appellant cannot escape its liability by fixing the blame entirely on the importer. By virtue of the above, I pass the following order.
10. I reject the appeal and uphold the impugned Order-in-original.
5.1 From the above reproduced findings, it can be noticed that though the liability and confiscation of the goods has been upheld, the fact remains that the importer has misstated and accepted that it was their mistake in directing the CHA not to include freight element and in order to achieve it, they had instructed for manipulating the shipping bills. Be that as it may, charge of abetment on the CHA could not be established, which is also more or less the findings of the first appellate authority.
6. In view of the foregoing, I hold that the impugned orders against the appellants are unsustainable and are liable to be set aside and I do so. The impugned orders to the extent they are contested in these appeals are set aside and the appeals are allowed