Case Law Details
Cargo Specialist Inc. Vs Commissioner of Customs (CESTAT Delhi)
CESTAT finds that it has been recorded in the final order that the appellant – Custom Broker inspite of having already handled eight export consignment in the past, till the inspection of the 9th consignment, has never met the exporter or the owner of M/s Fashion World, nor he had met any of the relevant person(s) namely Reyaz Ahmed @Rajbir @ Dharmender, who represented M/s Fashion World. In the final order it has been also observed that this appellant have placed great reliance on the freight forwarders through whom he had received the work as well as the documents for KYC. At no stage, the appellant CHA received the documents directly from the office of the exporter. I find that it has been rightly concluded in the final order that though this appellant and others have not made any big gain, in the attempted export of the prohibited goods, by the exporter. However, there has been element of negligence and/or vigilance on their part which has facilitated attempted exported of prohibited goods. CESTAT held that penalty imposed is justified.
FULL TEXT OF THE CESTAT DELHI ORDER
This rectification of mistake application has been filed by the appellant-assessee for rectification of Final order No. 51797 – 51800/2021 dated 08.09.2021 passed in Customs Appeal No. 52234 of 2019-CU.(SM) with other appeals of co-noticees.
2. The issue involved in the appeal was that the appellant – CHA filed airway shipping bill No. 5004801 dated 15.09.2014 on behalf of M/s Fashion World – exporter. The goods were declared as Clutch Plates for vehicles, packed in four wooden crates having gross weight of 1271 Kgs. (250 pcs. contained in each wooden crate). The declared value of the goods was Rs. 2,16,000/-. On examination by the Customs only 80 pcs. of clutch plates were found in the wooden crates and rest were wooden logs, which on further examination by Wildlife Officer, it was found to be red sanders, the export of which is prohibited. Accordingly, the goods were seized.
3. Vide Order-in-original dated 05.12.2016, penalty of Rs. 8 lakhs was imposed on this appellant being the Customs Broker under section 114 of the Act for their act of omission and commission. Being aggrieved, this appellant and other co-noticees filed appeal before the Commissioner (Appeals), wherein the Commissioner (Appeals) was pleased to reject the appeals. This Tribunal vide the aforementioned final order after appreciating the evidences and allegations and their defence observed that these appellants have not made profits and/or participated in the profits to be made in the export of prohibited goods. Rather these persons were doing work only on normal remuneration basis. Accordingly, the appeal was allowed in part by reducing the penalty from Rs. 8 lakhs to Rs. 80,000/-.
4. Learned Counsel states that this appellant is aggrieved with the following observation in para 19 of the Final Order, which reads as under:-
“further they have similarly facilitated the export of about eight consignments in the recent past and there is reasonable belief that such consignments also had prohibited goods.”
5. He further urges that there is no such allegation in relation to the earlier eight consignments either in the show cause notice or in the findings as contained in the impugned order. Secondly, it is urged that the appellant had submitted the IEC code, the address and current bank account number, alongwith PAN card of the exporter which have been found to be correct by the Department during investigation. It is further stated that on one instance, the appellant CHA had opportunity to look at the goods and same were found to be in order. Further, the appellant CHA have taken all reasonable care for verifying the identity and address of the exporter. Further, there is no requirement to physically meet or verify. The KYC norm also required to verify all documents and does not mandate a personal meeting / visit to the business premises of the exporter. Nor it is mandated that the goods should be packed in the presence of the CHA. He further urges that there is also error in para 20 of the final order, which reads as under:-
“Thus these three appellants were also duty bound to observe the KYC norms and to assist the Custom Broker in complying with his obligation under Customs Broker Licensing Regulation, 2013.”
6. Further, reliance is placed on the precedent decision of the Tribunal in the case of Manoj Kumar Nagar & Others vs. Commissioner of Customs, New Delhi – F.O. No. 52763-52765-CU(DB) dt. 09.08.2018, wherein it was held that the knowledge of offending goods is pre-requisite for imposition of penalty under Section 114 of the Customs Act, 1962.
7. Learned Authorised Representative appearing for the Revenue opposes the RoM application and urges that he same be dismissed. He further states that the appellant is trying for review / rehearing of the appeal, which is not permissible.
8. Having considered the rival contentions and after going through the record, I find that it has been recorded in the final order that the appellant – Custom Broker inspite of having already handled eight export consignment in the past, till the inspection of the 9th consignment, has never met the exporter or the owner of M/s Fashion World, nor he had met any of the relevant person(s) namely Reyaz Ahmed @Rajbir @ Dharmender, who represented M/s Fashion World. In the final order it has been also observed that this appellant have placed great reliance on the freight forwarders through whom he had received the work as well as the documents for KYC. At no stage, the appellant CHA received the documents directly from the office of the exporter. I find that it has been rightly concluded in the final order that though this appellant and others have not made any big gain, in the attempted export of the prohibited goods, by the exporter. However, there has been element of negligence and/or vigilance on their part which has facilitated attempted exported of prohibited goods.
9. Accordingly, I find that there is no error in the final order. In view of the above, I hold that there is no merit in the RoM application, the same is dismissed.
(Pronounced on 02.02.2022).
