CESTAT Sets Aside Section 112 Penalty for Lack of Specific Allegations in SCN

Cargo Placement & Shipping Agencies Pvt. Ltd Vs Commissioner of Customs (CESTAT Delhi)

The appeal was filed against the order dated 31.03.2013 passed by the Commissioner, ICD, TKD, New Delhi, imposing penalty under section 112(a)(i) of the Customs Act, 1962 on a customs broker for acts of omission and commission in relation to alleged misdeclaration and illegal import of goods. The appellant, a licensed customs broker under the Customs House Agents Licensing Regulations, 2004, was accused of failing to supervise its employees as required under Regulation 19 and thereby becoming liable to action under Regulation 20.

The show cause notice alleged that the appellant’s G-Card holder filed Bills of Entry without proper verification of documents or antecedents of the importers and that the General Manager had provided documents without sufficient due diligence, allegedly facilitating smuggling. The notice primarily called upon the appellant to show cause why action should not be taken under Regulation 20. Although paragraph 87(VI) stated that the appellant was liable to penalty under section 112 of the Customs Act, no specific imputation or detailed allegation under that provision was made.

The Commissioner, despite noting that no imputation had been made under the Customs Act in paragraph 88(e), imposed penalty under section 112(a)(i) on the ground that there was sufficient evidence of acts of omission and commission.