No Penalty Can Be Imposed For Introducing The Importer To IEC Holder: CESTAT

The bench of Anil Chaudhary (Judicial Member) has observed that no penalty can be imposed without proving the role of the person being charged.

The appellant/assessee is working as a clearing agent of imported goods but does not have any CHA/CB licence. Until 2007, the appellant had dealings with Habib-uz-Zaman, who was involved in the import of goods. Habib-uz-Zaman again approached the appellant in 2016 to help import marbles. Because Habib-uz-Zaman was not on whose IEC the goods could be imported, he asked the appellant to find someone on whose IEC the goods could be imported. Around the same time, one IEC holder, Devi Das Dhingra, Proprietor of M/s Ankit Enterprises, asked the appellant to help him surrender his IEC registration. Therefore, the appellant introduced Devi Das to Habib-uz-Zaman, and accordingly, for a consideration, Devi Das agreed to allow Habib-uz-Zaman to import marbles on the IEC of Devi Das. Habib-uz-Zaman sent a bill of lading dated 10.10.2016 showing the import of corrugated boxes. On enquiry by the appellant, Habib-uz-Zaman informed the appellant that due to an urgent requirement he imported corrugated boxes and he ensured that it would not be repeated. This was communicated by the appellant to Devi Das. The CHA was also appointed by Habib-uz-Zaman himself, and the appellant had no role in the importation of goods.

The DRI developed information regarding the smuggling of cigarettes of foreign origin from Singapore, which was declared to contain corrugated boxes (packing material) in the bill of lading. The bill of entry was not filed. As per the bill of lading, the consignment was shipped to M/s Ankit Enterprises. The container, on examination, was found to contain only a few corrugated boxes and the remaining container had cigarettes of foreign origin of different brands. A detailed investigation revealed the roles of various people, including the appellant, in the import of containers.

The appellant learned of Habib-uz-Zaman's improper import only after he was summoned by a customs officer for the recording of his statement, which was followed by another statement.The appellant categorically denied knowing anything about Habib-uz-Zaman's illegal cigarette imports. The appellant categorically stated that he was not involved in the improper import of cigarettes nor involved in the clearance of the consignment.

The appellant submitted that the role of the appellant was only to arrange a meeting between Devi Das and Habib-uz-Zaman and that the appellant neither filed the bill of entry nor was involved in the clearance of goods. Any action taken by the appellant prior to the importation of goods could not be used to invoke a penalty under Section 112(b) of the Customs Act.

The appellant contended that the lower authority had wrongly held that since the appellant facilitated the misuse of IEC, he was to be treated as if he was involved in a particular import of cigarettes, whereas there was not an iota of evidence on record either in the form of document or statement that the appellant had any knowledge of the so-called mischief played by Habib-uz-Zaman.

The tribunal noted that the only allegation against this appellant is that he introduced the actual importers, Habib-uz-Zaman and Badi-uz-Zaman, to the IEC holder, who agreed to the use of his IEC on consideration to be provided by Habib-uz-Zaman. Thereafter, there is no role for the appellant forthcoming. None of the co-noticees has stated anything against this appellant except that he has introduced the importer and the IEC holder.

The ITAT determined that none of the conditions specified in Section 112(b) of the  Customs Act for imposing a penalty were met. Accordingly, an order imposing a penalty is set aside.

Case Title: Girish Kumar Singh Versus Commissioner Of Customs

Citation: Customs Appeal No. 50503 of 2021-SM

Dated: 03.08.2022

Counsel For Appellant: Advocate Rajesh Chhibber

Counsel For Respondent: Authorised Representative Tamanna Alam

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