Case Law Details
Nawal Kishore Singh Vs Commissioner of Customs (Export) (Delhi High Court)
The Delhi High Court considered an appeal against a penalty imposed on an individual under Sections 112(a) and 114AA of the Customs Act, 1962, in connection with export of impugned goods. The penalty was originally sustained by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), despite the exoneration of the appellant’s employer, a Custom House Agent, in a related proceeding.
The Tribunal had earlier set aside the penalty imposed on the employer, holding that although there were phone calls between parties around the time of export, there was no sufficient evidence to justify penalty. It further observed that even if the employer had knowledge of the transaction, such knowledge alone was not sufficient to impose liability.
In the present case, the appellant was admittedly an employee of the same Custom House Agent. The only material relied upon to implicate the appellant was alleged communication with other individuals involved in the export. The High Court noted that the Tribunal had not discussed any independent evidence explaining why the appellant should be penalised when the employer, against whom similar evidence existed, had already been exonerated.
The Court observed that the finding of involvement was based on the same set of evidence that had been considered insufficient in the employer’s case. It found no justification for treating the employee differently, particularly when the alleged acts were performed in the course of employment. The Court also noted that the employer’s exoneration had attained finality, as it had not been challenged.
The High Court held that once the employer was exonerated on the same facts, there was no basis to sustain the penalty against the employee. It concluded that the Tribunal’s order lacked justification and consistency.
Accordingly, the appeal was allowed and the penalty imposed on the appellant was set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Heard.
2. Vide final order dated 10th August, 2018, the Customs, Excise & Service Tax Appellate Tribunal (‘CESTAT’) has allowed the Customs Appeal No.C/50474/2018 titled Bhupinder Singh v. C C-New Delhi ICD TKD Export.
3. The said appeal was against the order, whereby penalty was imposed on Bhupinder Singh, a Custom House Agent in exercise of powers under Sections 112(a) and 114AA of the Customs Act, 1962 to the tune of Rs. 3 crores. The CESTAT while dealing with the case of Bhupinder Singh has held that there were phone calls in between Deepak Kumar Rishi and Nawal Kishore Singh, e., present appellant, which were for a period from 29th September, 2011 till 30th October, 2011. In the wake of the export being of 27th October 2011, the CESTAT further held that even if the said appellant therein, namely, Bhupinder Singh was having knowledge of the import of the impugned goods, that by itself, he being a Custom House Agent and whose licence was suspended, cannot be held liable for payment of penalty. The CESTAT further held that there is no evidence against the said appellant to justify the imposing of penalty under the said provision and as such, allowed appeal.
4. As regard the present appellant is concerned, the order speaks of the appellant being admittedly an employee of said Bhupinder Singh who was exonerated.
5. In so far as the material available against the appellant, as discussed in the order impugned, the CESTAT held that the benefit granted to Bhupinder Singh, the employer of the present appellant cannot be treated at par with that of the present appellant. The fact remains that the CESTAT has not discussed any evidence in the matter as to why the appellant is being implicated though he was admittedly styled as an employee of Bhupinder Singh in relation to whom the order of saddling penalty was already set aside.
6. Though the CESTAT has recorded a finding that the appellant was an employee of the Bhupinder Singh who was exonerated of the liability, the only material to connect the appellant was that he has acted in connivance with Deepak Rishi and Bhupinder Singh. Based on very same set of evidence, Bhupinder Singh was exonerated and we failed to understand what prompted the CESTAT to proceed against the appellant thereby maintaining the penalty.
7. When confronted, the counsel for the respondent is unable to justify the order impugned based on the material available on record.
8. In the capacity of an employee even if the appellant has acted in the matter of assisting the export, the same act was pursuant to his status as that of employee of Bhupinder Singh and once the employer Bhupinder Singh has been exonerated, we see no reason to maintain the order against the appellant.
9. As far as the order passed in favour of Bhupinder Singh exonerating him from the payment of penalty is concerned, the respondent has not questioned the same till this date and as the said order has attained finality, there is no impediment in the claim of appellant claiming similar relief.
10. That being so, the present appeal stands allowed in terms of prayer clause ‘a’ and ‘b’.
11. Pending applications stand disposed of accordingly.
Author Bio
