Custom House Agents can be penalized for facilitating imports using forged licenses, highlighting their duty to verify documentation and ensure compliance with customs regulations.

ORDER :

1. Heard learned advocate Mr.Parth Rachchh for learned advocate Mr.Paresh M. Dave for the appellants and learned advocate Mr.Utkarsh R. Sharma for the respondent.

2. These Tax Appeals are filed under Section 130 of the CUSTOMS ACT , 1962 (for short ‘the Act’) proposing the questions of law arising out of the Common Judgment and Order dated 17.09.2003 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short ‘the CESTAT’) in Appeal No.C/89 to 98/2002/NB-C so far as confirmation of the penalty imposed upon the appellants are concerned.

3. This Court by order dated 07.02.2008 admitted the Appeals in terms of the following questions :

“1. Whether a show cause notice issued under Section 28 of the CUSTOMS ACT , 1962 by the Additional Director, DRI [and not by a Customs Officer] was valid in law?

2. Whether an application for rectification of mistake filed by the appellant could have been decided by a Bench of the Tribunal not comprising of the Members who passed the orders on the appeals originally?

3. Whether the penalties imposed on the appellants are correct and justified in the facts in the case”

4. Thereafter, by order dated 20.11.2024, question No.1, having been settled by the decision of the Hon’ble Apex Court in case of Commissioner of Customs Vs. Canon India Private Limited , 2024 SCC Online SC 3188, learned advocate Mr.Parth Rachchh for the appellants prayed for time to argue the matter qua question Nos.2 and 3 only.

5. Learned advocate Mr.Parth Rachchh for the appellants, at the outset, submitted that question No.2 admitted by this Court pertains to whether the application for rectification of mistakes filed by the appellant could have been decided by a Bench of Tribunal not comprising of the Members who passed the orders in Appeals originally has become academic in view of the fact that the Members who have decided the Appeals as well as the application for rectification of mistakes are not available due to afflux of time. We therefore, decline to answer the question No.2 having become academic by afflux of time.

6. With regard to question No.3, as to whether the penalties imposed upon the appellants are correct and justified in the facts of the case is concerned, learned advocate Mr.Parth Rachchh invited the attention of the Court to the findings of the Tribunal in the impugned Judgment and Order to submit that so far as the appellants are concerned, they were only the agents who have acted at the instructions given to them for filing the Bill of Entries along with the relevant documents including the advance licenses and therefore, no penalty could have been levied upon the appellants under Sections 112 (a) and 112(b) of the Act respectively.

7.1. The appellant No.1-M/s.Kandla Clearing Agency Private Limited is a Custom House Agent (CHA) and appellant No.2-Shri Shantilal Jain was Director of the appellant No.1.

7.2. It is the case of the appellant that during the years 1995-96, the business activities of the appellant No.1-Company were looked after by one Director of the Company- Shri Pankaj Joshi residing at Kandla whereas, the appellant No.2-Shri Shantilal Jain was residing at Mumbai doing his own business activities.

7.3. During the normal course of business, the appellant No.1-Company was approached by one Shri Raju Mohta for clearance of goods imported under an Advance License under the DEEC Scheme and handed over relevant documents to file Bill of Entries for clearance of the imported consignments of Polypropylene in name of various parties. Shri Pankaj Joshi who subsequently expired filed Bill of Entries as per the instructions given by Shri Raju Mohta as CHA. However, the appellant No.2 could not produce any of the documents before the respondents except some of the documents which were provided along with the show-cause notice from the Office of the respondents.

7.4. Thereafter, the Mumbai Zonal Unit of Directorate of Revenue Intelligence