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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal When statute specifically provides for a code of conduct and penalty for infringement thereof, it is not proper to bring such violation within the realm or scope of another statutory provision MANU/CE/0141/2018 - (21 Mar 2018) </td> </tr> <tr> <td align="left" valign="top">Fast Cargo Movers and Ors. Vs. Commissioner of Customs, Jodhpur</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">Instant appeals are against common impugned order, involving the issue of imposition of penalties for illegal export of Red Sanders, instead of the declared goods as Polished Marble Slabs. The DRI officers gathered intelligence that, the exporter Ritu Corporation, Proprietor exported two containers from ICD, Thar Dry Port, Jodhpur under two shipping bills, both dated 3rd September, 2012, by declaring the goods as Polished Marble Slabs and the said consignments had sailed to the destined Port from Mundra Port. On identification of the said containers, the same were called back to the Mundra Port. On examination, it was found to be sealed with customs seal and shipping line seal. It was further found that, the right side doors in both the containers were tampered with and they were re-fixed with chemicals from inside. The officers found that, the containers were stuffed with huge quantity of Red Sander Logs, which is a prohibited item under the EXIM Policy for export outside the country. 
After investigation and recording of statements of different persons, a show cause notice was issued to various persons, including the Appellants herein. By the impugned order, the Adjudicating Authority confiscated the logs of Red Sanders of the seized consignment along with past four exports of Ritu Corporation and also imposed penalties on the proprietor of the exporter, amongst others. In the instant appeals, the adjudicating authority imposed the penalties on the Appellants under Section 114 of the Customs Act, 1962. In addition to the said penalties, further penalty under Section 114AA of the Act was also imposed on the Appellant. Feeling aggrieved with the impugned order, the Appellants have preferred these appeals before the Tribunal. 
Section 114 of the Customs Act, 1962 mandates imposition of penalty, in cases, when any person, who in relation to any goods, does or omits to do any act, which renders the goods liable for confiscation. From the observations of the adjudicating authority, it is found that, the charges leveled against the Appellants are basically confined to the fact that, as the custodian, clearing & forwarding agents, shipping line agents and customs house agents in context with the export of alleged goods, the Appellants have grossly neglected their duties and responsibilities cast on them under the Regulations, namely, Handling of Cargo in Customs Area Regulations, 2009 and Customs House Agents Licensing Regulations, 2004. The said regulations provide the procedure for suspension or revocation of license and for imposition of penalty for contravention of the laid down provisions contained therein. In exercise of the powers conferred by the Customs Act, 1962, the CBEC has formulated the said Regulations. When the statute specifically provides for a code of conduct and penalty for infringement thereof, it is not proper and appropriate to bring such violation within the realm or scope of another statutory provision i.e. Section 114 of the Act for punishing the person, by way of imposing penalty, with the allegation of intention to smuggle or attempt to smuggle the goods or abetting such act of smuggling. In other words, anybody can be penalized under Section 114 of the Act, but the authorities are under the statutory obligation to prove that because of the wrong doing, omission or commission on part of such person, the goods became liable for confiscation. 
In the present appeals, it is seen that, the allegations against the Appellants are mainly concerned with failure to discharge their duties and responsibilities mandated under various Regulations for dealing with goods in legalized manner. Apparently, there is no material evidence available in records to prove that, the Appellants were either involved in smuggling of the goods, or encouraged and supported the wrong doer in doing the wrongful act in attempting to export the goods. These penal provisions call for prior knowledge of wrong doing or existence of deliberate intend (mala fide). Section 114A of the Act, also provides for imposition of penalty for furnishing incorrect or false declarations. Here also such declaration should be intentional with prior knowledge. Thus, as per the settled principles, penal provisions cannot be invoked for imposition of penalties under Section 114 and 114AA of the Act. There is no substance in the impugned order, in support of imposition of penalties on the Appellants. Accordingly, the appeals are allowed in favour of the Appellants.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Penalty, Imposition, Validity</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>