The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that for the act of an employee, direct responsibility is fixed on the customs broker.
The bench of Dr. Suvendu Kumar Pati (Judicial Member) has confirmed the penalty and relied on para 13(12) of the CHA Licencing Regulation, 2004 which says, "the customs broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts and omissions of his employees during their employment."
The two manual shipping bills were filed by the appellant as Customs House Agent (CHA) for M/s. Mesto India Pvt. Ltd. at SEZ, Panvel through M/s. DHL Logistics Pvt. Ltd., an authorised Appellant as C & F Agency, is engaged to complete the formalities and clearance at ACC, Sahar, Mumbai.
The Ground Handling Agency (GHA) handled it for export, but it did so without the examination and endorsement of the EFO and without the Let Export Order from the proper Officer of Customs. The matter was referred to SIIB (Export), ACC, Mumbai for further investigation that resulted in holding the goods liable for confiscation under Section 113(g) of the Customs Act with the imposition of a penalty on Appellant CHA and the GHA by the adjudicating authority.
The imposition of the penalty was confirmed in the appellant's appeal before the Commissioner of Customs (Appeals) under Section 114(iii) of the Customs Act. However, the penalty was reduced from Rs. 2,00,000 to Rs. 50,000 on the ground that no intentional action was forthcoming on the part of the appellant in such an act of export without a Let Export Order.
The Appellant argued that there was a clear finding by the Commissioner (Appeals) that the GHA made a mistake in their responsibility to ensure that the documents were cleared by Customs before the removal of goods. The appellant's only fault was that it had not informed the customs authorities and it failed to stop the loading of the consignment even after informing the GHA.
The department contended that intention is immaterial for the purpose of imposition of a penalty. Section 114 clearly states that for both acts of omission and commission that would render goods liable for confiscation under Section 113, a penalty is imposable. There was also a wrong statement made by the Director of the Appellant Company to the effect that after completion of customs formalities, goods were directed to be loaded by the GHA. There was an admission by the concerned clerk of the Appellant Company that he inadvertently handed over those two shipping bills to M/s. Cambata Aviation Pvt. Ltd (GHA) due to heavy workload on that particular night he admitted his guilt as well as requested a lenient view, for which the learned Commissioner (Appeals) had reduced the penalty that needed no interference by the Tribunal.
The CESTAT dismissed the appeal and the order passed by the Commissioner of Customs (Appeals) in imposing a penalty under Section 114(1) of the Customs Act for Rs.50,000 on the Appellant CHA was hereby confirmed.
Case Title: M/s Meghna Clearing and Forwarding P. Ltd. Versus Commissioner of Customs (Export)
Citation: Customs Appeal No. 87397 of 2019
Counsel For Appellant: A.K. Prabhakar
Counsel For Respondent: Bhushan Kamble