Whether CHA liable for misdeclaration done by exporter?

PJ/CASE LAW/2015-16/2784

Case:- PANKAJ BABU SAINI VERSUS COMMISSIONER OF CUSTOMS, GHAZIABAD

Citation:-2015(316) E.L.T. 164 (Tri.- Del.)

Brief Facts:- Learned Counsel, Shri Piyush Kumar, Advocate appeared for Shri Pankaj Babu Saini, CHA of M/s. Richi Rich Agro Foods Pvt. Ltd. 2. Commissioner of Customs, vide Order-in-Original No. 1/Commissioner/GZB/CUS/2012, dated 28-3-2013, imposed penalty of Rs. 1 lakh on the CHA for violation Customs House Agent Licensing Regulation, 2004 read with provisions of Foreign Trade (Development & Regulation) Act, 1992 he was under statutory obligation to vouch for authenticity of the declaration. CHA has failed to check the authenticity the cargo.

Appellant contentions:-Learned Counsel invited attention to the Commissioner's order wherein Commissioner on the basis of misdeclaration made by the exporter has also held CHA liable for contraventions. Learned Counsel submitted that basmati rice was cleared after due scrutiny of the documents and due examination of the containers by the Customs. Containers were subjected to examination by the port. Sample was drawn and on the basis of test report, it came out that the ex-porter has made misdeclaration. Instead of basmati rice, they actually exported non basmati rice in terms of DGFT Notification No. 55 (RE-2007)/2004-2007, dated 5-11-2008. He contended that the CHA was not involved in the loading of containers in the factory premises. His connivance in misdeclaration is not proved by any evidence. Samples were drawn and it was on the basis of test report, it was found that exporter has made misdeclaration. Exporter has rightly been subjected to redemption fine and imposition of penalty by the adjudicating authority.

Respondent contentions:-On the other hand, learned DR pointed out that, the Commissioner has clearly observed that CHA was equally culpable for not adhering to statutory obligation vested in him inasmuch as he utterly failed to perform the responsibility of verifying the authenticity of the cargo prior to receipt of goods within the customs bonded warehouse.

Reasoning of Judgment:-The short issue for consideration is whether CHA has knowingly participating in the misdeclaration and was involved helping exporter for exporting non basmati rice in the guise of basmati rice. From the facts it clearly comes out that container was stuffed in the factory of exporter and CHA was not present there. Neither circumstantial evidence which could show that CHA contributed to the misdeclaration nor any mens rea has been imputed to him. Even on examination of containers, the sample was drawn and sent to the laboratory and laboratory has rightly pointed out that rice contained in the container were non basmati rice and not basmati rice. tribunal do not find any support or instance which could lead to CHA being made liable for imposition of penalty although tribunal is aware that CHA has great responsibility in following export and import procedure requirement. Considering totality of facts and circumstances, the Tribunal was not able to find active participation CHA in misdeclaration hence, the penalty imposed on CHA is not justified and the same is set aside.

Decision:- Appeal allowed.

Comment:-The substance of the case is that although it is the responsibility of CHA to adhere to the prescribed export and import procedure but penalty cannot be imposed on CHA if means rea is not proved on his part. As there was no active participation of CHA in misdeclaration, the penalty imposed on the CHA was set aside and the appeal was allowed.

Prepared By:- Anash Kachaliya

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PJ/CASE LAW/2015-16/2784

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