Jeyam & Co. Vs Commissioner of Customs (CESTAT Chennai)
The case concerns the imposition of penalty on a Customs House Agent (CHA) under Section 114(i) of the Customs Act, 1962 for allegedly facilitating the attempted smuggling of prohibited goods. The appellant challenged the Order-in-Original dated 30.10.2015 passed by the Commissioner of Customs, Chennai-IV, which imposed a penalty of ₹2.10 crore.
The facts indicate that the appellant, acting as a Customs Broker, filed a shipping bill for export of polished granite slabs to Dubai. Based on intelligence regarding smuggling of red sanders, authorities investigated and recalled the container from Dubai to Chennai. Examination revealed 439 red sander logs weighing 12.33 MT, valued at ₹25.54 crore, which were prohibited for export. The container seal was also found tampered. The appellant admitted in his statement that he had allowed another logistics company to use his CHA licence, which facilitated the attempted smuggling.
The appellant argued that penalty under Section 114 can be imposed on a third party such as a CHA only when there is clear evidence of conscious knowledge or intentional involvement in smuggling. It was contended that there was no material establishing such knowledge or participation, and therefore the penalty was not sustainable. Reliance was placed on various judicial decisions supporting this position.
