Commissioner Of Customs-Ahmedabad vs M/S Ceat Limited
- CitationAppeal No. : C/13094/2014
Ratio decidendi
The rule this decision rests on
The importer cannot be penalised under Section 112(a) of the Customs Act, 1962 for the misconduct of its clearing agent's employee where the importer or its employees could not have had reason to believe the goods were liable to confiscation, the goods having been cleared on a Bill of Entry on which duty was paid; an importer's act of erroneous business diligence in paying on instruments shown by fraudsters is not an act or omission rendering the goods liable to confiscation. Where the importer has discharged the customs duty and interest on all goods imported, no penalty can be visited upon it on the ground that the goods were made liable to confiscation by an omission of the importer.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[ Arising out of OIA-AHM-CUSTM-000-APP-210-14-15 dtd 2.6.2014 passed by Commissioner of CUSTOMS-AHMEDABAD ]
Commissioner of CUSTOMS-AHMEDABAD - Appellant(s)
Vs.
M/s Ceat Limited - Respondent(s)
Represented by For Assessee : Shri G P Thomas, Authorised Representative For Revenue : Shri Manish Jain, Advocate
For approval and signature :
Mr. H.K. Thakur, Hon.ble Member (Technical)
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes
CORAM :
Mr. H.K. Thakur, Hon.ble Member (Technical)
Date of Hearing / Decision : 12/6/2015
ORDER No. A/10800 / 2015 dtd 12/6/2015
Per : Mr. H K Thakur;
This appeal has been field by the Revenue against OIA-AHM-CUSTM-000-APP-210-14-15 dated 2.6.2014.
2. Shri G P Thomas, Authorised Representative, appearing on behalf of the Revenue argued that penalty was required to be imposed upon the appellant as the person engaged in the preparation of forged Challan was appearing as an agent of the respondent. That any action committed by the agent has to be treated as an action preformed by the Respondent. It was his case that penalty was required to imposed upon the Respondent. The Authorised Representative for Revenue firmly argued that the order passed by the First Appellant Authority should be set aside and the order passed by the Adjudicating Authority should be upheld.
3. Shri Manish Jain, Advocate, appearing on behalf of the respondent argued that this issue of imposition of penalty has been decided in favour of various importers by this Bench under Order No A/10516-10535/2014 dated 4.4.2014. It was thus argued by the Learned Advocate that no penalty is imposable upon the present respondent also.
4. Heard both sides and perused the case records. The issue involved in this appeal is whether penalty can be imposed upon the importer for some misdeeds of the employee of their clearing agent during customs clearance of their imported goods. The respondent has relied upon the case laws of Super Chemicals Ltd and Others Vs CC Kandla where as per Order No. A/10516-10535/2014 dated 4.4.2014 under similar circumstances following observations have been made by this Bench with respect to the penalties imposed upon the importers, Para 12 of the order dt 4.4.2014 are reproduced below:
12. I take up the cases of importers on whom the penalties have been imposed. It is the finding of the Adjudicating Authority that the importers and the individuals connected with the importers need to be visited with penalties for the reason that they had not ascertained the correct identity, the persons who were selling demand drafts and also were have contravened the business ethics by purchasing demand drafts which were not issued by their own bankers. In my considered view, the action of the importers or their employees in paying an amount for which was shown by the individuals who master minded the entire fraud, can at the most be an act of erroneous business diligence, on their part. In my view, such an action is not covered under the provisions of Section 112 (a) of the Customs Act 1962 in as much as the importers or their employees never could have had a doubt that their goods are liable for confiscation, as the said goods were removed on BOE on which there was payment of duty. In any case, importers having discharged the customs duty and the interest thereof on all the goods imported by them, the question of visiting them with penalty does not arise. In the case in hand, the importer cannot be charged with the commission of omission which made the goods liable from confiscation. In view of these findings, I hold that the importers and their employees have made out the case for setting aside the penalty imposed on them. The above view is fortified by the following decisions :
1. M/s ITW India Ltd vs Commissioner of Customs, Chennai 2006(198)ELT.117 (Tri.Bang.)
2. M/s Hetero Drugs Ltd vs. Commissioner of Customs, Chennai - 2004(168)ELT.211 (Tri. Bang.)
5. Respectfully following the ratio laid down by this Bench, I hold that the present appeal filed by the Revenue is required to be rejected. In view of the above observations, appeal filed by the Revenue is rejected.
(Dictated and pronounced in the Court)
(H.K. Thakur) Member (Technical)
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