MBK Logistics Private Limited Vs Commissioner of Customs (Kerala High Court)
Kerala High Court held that penalty under section 117 of the Customs Act cannot be sustained since no reasons are assigned for imposition of the same. Further, since main allegation against employee set aside, penalty u/s. 117 cannot be sustained.
Facts- The appellant was visited with a proceeding for imposition of penalty and cancellation of the license on the pretext that the employees of the appellant had misused the seal of the customs authority. The notice to show cause was answered by the appellant. However, the reply was not accepted, and the customs authority proceeded to cancel the license of the appellant and imposed a penalty of Rs.50,000/-. Aggrieved by the said order, the appellant approached the appellate tribunal.
In the appeal, on an extensive consideration of the material facts, the tribunal concluded that there is no evidence to show that the appellant had forged the seal of the customs Thus, it was found that the appellant is not vicariously liable. However, despite the aforesaid finding, the tribunal proceeded to sustain the penalty u/s. 117 of the Customs Act, which is impugned in the present appeal.
Conclusion- Held that a perusal of the order impugned reveals that while the tribunal has found that there are no reasons to sustain the allegations in the show cause notice and thereby interfered with the order of cancellation of the license, it has not assigned any reason for nevertheless sustaining the penalty under Section 117 of the Customs Act. Moreover, when the employees against whom the allegations of forgery were made have been exonerated and the penalty imposed against them has been set aside, we find no reason to sustain the findings of the tribunal that penalise the appellant.
