2004 (97) ECC 255 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

Southern Regional Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

R. Padmanabhan & K. Kirupanidhi

Versus

Commissioner of Customs, Chennai

Appeals No. C/001172 to 001181/1998 and C/001275 to 001284/98/Mas

[Arising out of Order-in-Appeal Nos. C.Cus. 701 to 710/98 and C.Cus. 711 to 720/98 dated 21.7.98 passed by the Commissioner of Customs (Appeals), Chennai]

Final Order No. 437 to 456/2004, dt. 1.6.2004, Certified on 15.6.2004

Confiscation and Penalty

Import -- Silver covered -- Qualified for clearance under Regulations 9 and 10 of CHALR, 1984 -- Power of attorney of imported company made the clearance -- Importing company not penalized for abetment by the authorities, hence, no question of any abetment arises against the power of attorney holders for the purpose of invoking clause (a) Section 112 and penalty under Section 111 of the Customs Act.

Appeal allowed

PRESENT :

Shri M.S. Kumara Swamy, Const for the appellant.

Smt. R. Bhagya Devi, SDR for the respondent.

Per : P.G. Chacko

These are appeals filed by two persons who acted on behalf of M/s. Swamy & Company, Custom House Agent for the clearance of silver covered by twenty Bills of Entry. These appellants are aggrieved by the penalties imposed on them by the lower authorities under Section 112 of the Customs Act.

2. Heard both sides.

3. Ld. Consultant for the appellants has given a brief account of the relevant facts. Shri R. Padmanabhan, one of the appellants, was holding Power of Attorney executed by M/s. Swamy & Company for the purpose of clearance of goods imported by their clients. He was eligible for the purpose as he had qualified himself under Regulations 9 and 10 of the Custom House Agents Licencing Regulations, 1984. The other appellant, Shri K. Kirupanidhi was a partner of M/s. Pragathi Shipping and Transport Services. Shri Padmanabhan, on the strength of aforesaid Power of Attorney, used to employ Shri K. Kirupanidhi for the processing of import documents on behalf of M/s. Swamy & Company and, accordingly, Shri Kirupanidhi filed the relevant Bills of Entry and followed it up. Appropriate duty of customs was paid on the goods and out-of-charge was duly taken thereof. However, when the goods were about to be physically removed, the SIIB personnel stepped in and booked a case for confiscation and penalty against the CHA and the persons who worked under them. Show-cause-notices were issued, and the same were contested by the noticees. The original authority, who adjudicated the notices, ordered absolute confiscation of the goods under Section 111 of the Customs Act and also imposed penalties on the appellants and others under Section 112 of the Act. The adjudicating authority, however, did not penalise the CHA viz. M/s. Swamy & Co. It only administered a "severe warning" to them. The appeals preferred by these appellants against the penalties imposed by the adjudicating authority did not succeed before the Commissioner (Appeals). Hence the present appeals.

4. Ld. Consultant has argued that nothing has been brought on record by any of the lower authorities, which is enough to penalise the appellants under Section 112. The requisite finding of fact is missing in the order of the authorities. The consultant has further pointed out that, where the CHA was exonerated of charges in relation to the consignments in question, it was not open to the authorities to proceed against the persons who worked under the CHA in accordance with law. Ld. SDR has reiterated the findings of the original authority and the lower appellate authority.

5. We have given careful consideration to the submissions. The finding by the original authority is that the appellants had abetted the clearance of goods liable for confiscation. The penalties are on the basis of this finding. We are immediately attracted to Section 112(a) of the Customs Act which, in respect of improper importation of goods, provides for penalty on a person who, in relation to such goods, does or omits to do any act, which act or omission would render such goods liable for confiscation under Section 111, or abets such act or omission. Clause (b) of Section 112, does not figure for consideration inasmuch as none of the authorities below has found that the appellants had acquired possession of, or were in any way concerned in physically dealing with, the imported goods. Apparently, it is clause (a) of Section 112 which has been invoked in this case. More particularly, this clause has been invoked for penalizing the appellants on the strength of a finding that they abetted clearance of the goods which were held liable for confiscation. What the appellants abetted, according to the findings of the lower authorities, was clearance of the imported goods. But the clearance was done by the CHA, M/s. Swamy & Co. and they were not penalised. Where the act of CHA has been exonerated from penalty, no question of any abetment arises for the purpose of invoking clause (a) Section 112. In other words, when no offence is found against the main party, there can be no abetment, by any other person, of offence of the main party. Thus, we find, the imposition of penalty on the appellants for something which they did on behalf of the CHA is ill-founded. We, therefore, cannot sustain the penalties. The appeals are allowed with consequential reliefs to the appellants.

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