Case Laws

2019 (11) CESTAT BANGALORE

SEA QUEEN SHIPPING SERVICES PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE

 

Imposition of penalty on CHA under section 112(a) of the Customs Act 1962 - short paid duty paid along with interest and penalty on being pointed out - HELD THAT:- Once the original importer after being pointed out by the audit have paid the differential duty along with interest, there was no necessity to issue the show-cause notice under Section 28 of the Customs Act.

 

Also, Department has not been able to bring any material on record to show that there is a aiding and abetting by the appellant to the importer - Further, in the impugned order no penalty has been imposed on the importer and penalty has only been imposed on the CHA under Section 112(a) of the Customs Act for abetting or aiding which is not established in the present case and therefore there is no justification for imposing the penalty on the CHA.

Appeal allowed - decided in favor of appellant.

No.- C/21547/2018-SM

Order No.- Final Order No. 20871/2019

Dated.- October 18, 2019

HONOURABLE MR. S.S GARG, JUDICIAL MEMBER

Mr. A.K. Jayaraj, Advocate For the Appellant

Mrs. C.V. Savitha, Supdt. (AR) For the Respondent

ORDER

 

 

Per: S.S GARG

 

The present appeal is directed against the impugned order dated 10.11.2017 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has upheld the Order-in-Original imposing penalty of Rs.5,000/- Rupees Five Thousand only on the appellant. Briefly the facts of the present case are that the appellant is a custom broker holding license number AAACS6709BCH002. The appellant rendered his services to M/s. Corporation Bank Ltd., Bangalore (hereinafter called as the said importer) for import of Gold bars (hereinafter referred to as the impugned goods). These gold bars were imported through 5 BOEs between period 30.03.2012 to 15.01.2013, classified under CTH 71081200 of Customs Tariff Act, 1975 and appellant claimed or availed an exemption of Basic Customs duty under S.No. 323 of Notification No. 12/2012-Cus. dated 17.03.2012. Later, Department through an inquiry revealed that on the above said impugned goods, the duty was to be paid under Notification 36/2001-Cus. (NT) dated 03.08.2001 as amended by Notification No. 30/2012-Cus. (NT) dated 30.03.2012. The Department found that the actual duty payable was Rs.6,22,14,735/- Rupees Six Crore Twenty Two Lakhs Fourteen Thousand Seven Hundred and Thirty Five only whereas duty paid by M/s. Corp Bank Ltd. (the importer) was  Rs.6,08,22,993/- Rupees Six Crore Eight Lakhs Twenty Two Thousand Nine Hundred and Ninety Three only. As a result there was short payment of duty of Rs.13,91,743/- Rupees Thirteen Lakhs Ninety One Thousand Seven Hundred and Forty Three only as the aforesaid BOEs was self-assessed by the importer under Section 17 of the Customs Act and was facilitated through RMS System. The proceedings were initiated against the importer and the appellant. It is vide OIO No. 384/2015-16 dated 31.03.2016 of the Additional Commissioner of Customs, a penalty of Rs.5000/- Rupees Five Thousand only was imposed against the appellant for violation of Rule 13(d) of the erstwhile Customs House Brokers Licensing Regulation 2013 r/w Section 112(a) and Section 117 of the Customs Act, 1962. Hence this appeal.

 

2. Heard both the parties and perused the records.

 

3. Learned counsel for the appellant submitted that the impugned order imposing the penalty on the appellant is not sustainable in law as the same has been passed contrary to the binding judicial precedent and without appreciating the facts and the evidence on record. He further submitted that as soon as the short payment of duty was pointed out, the importer Corporation Bank paid the differential duty along with interest before the issue of show-cause notice in four Bills of Entry and with regard to one Bill of Entry they have paid the differential duty within 30 days of the receipt of show-cause notice. He further submitted that once the importer had paid the differential duty, then there was no question of issuing the show-cause notice which also admits that the importer has paid the differential duty. He further submitted that once the differential duty has been accepted along with interest by the Department and no penalty has been imposed on the main importer, then how a penalty of Rs. 5,000/- Rupees Five Thousand only can be imposed on the appellant under the provisions of Section 112(a) of the Customs Act, 1962. He further submitted that there is no aiding or abetting on the part of the appellant because the importer is a Public Sector Bank and there is no fault on their part also.

 

4. On the other hand, the learned AR defended the impugned order.

 

5. After considering the submissions of both the parties and perusal of the material on record, I find that once the original importer after being pointed out by the audit have paid the differential duty along with interest, there was no necessity to issue the show-cause notice under Section 28 of the Customs Act. Further I find that the Department has not been able to bring any material on record to show that there is a aiding and abetting by the appellant to the importer. Further I find that in the impugned order no penalty has been imposed on the importer and penalty has only been imposed on the CHA under Section 112(a) of the Customs Act for abetting or aiding which is not established in the present case and therefore I do not find any justification for imposing the penalty on the CHA in the facts of this case and therefore I drop the penalty by allowing the appeal of the appellant.

(Operative portion of the Order was pronounced in Open Court on 18/10/2019)

 

 

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