A Customs House Agent is not liable for penalties under Section 117 of the Customs Act for mis-classification of goods in Bill of Entries if they acted in good faith upon the information provided by the importer, who holds the primary responsibility for the accuracy of declarations.

DR. RACHNA GUPTA

Present order disposes of 4 appeals pertaining to the same appellant, the Customs House Agent (CHA) and involving the same issue. The details are as follows:

Briefly stated, facts relevant for the present adjudication are as follows:

2.1 During Post Clearance Audit (PCA) of the import consignments of the above named importers, it was observed that they had misdeclared the goods for getting those cleared while availing the benefit of either nil BCD under Sl. No. 544 of Notification No.50/2017-Cus. dated 30.06.2017 and IGST @5% and 18% under S.No.245 of Schedule-I and S.No.373 of Schedule-III of IGST Notification No.1/2017-Integrated Tax (Rate), dated 28.06.2017 (in Appeal No. 55343 and 55367/2023) to take advantage of lower rate of IGST @ 5% thereby resulting into short levy.

2.2 It is also alleged that the primary responsibility was of the Customs Broker (CB) to facilitate the importer in filing the actual information to the department in respect of the import of the items along with correct duty payment. However, the appellant-CHA never responded in the matter to the department. Alleging that the Customs Broker had failed to fulfill their basic responsibility that it appeared to be liable to be penalized under Section 117 of the Customs Act, 1962 for not presenting the actual facts and not responding in the matter to the department. Accordingly, respective show cause notices, as mentioned in the table above were issued proposing the respective duty demands and imposition of respective penalties upon the appellants as well as on the co-noticee-importers, as mentioned in table above. The penalty under Section 117 of the Customs Act was proposed to be imposed on the appellant CHA. The proposals of four of the show cause notices have been confirmed vide respective Order-in-Originals as mentioned in the table above. Being aggrieved the appellant is before this Tribunal.

3. We have heard Dr. B.L. Garg, learned Advocate for the appellant and Shri Ram Pravesh Prasad, learned Authorized Representative for the department.

4. Learned counsel for the appellant submits that the appellant merely filed Bills of Entry based on documents and instructions received from the importers. He had no technical competence to question the importer’s classification. It is submitted that responsibility for correct classification solely rests on the importer in terms of Sections 17 and 46 of the Customs Act, 1962, which mandate self-assessment of duty and accuracy of declaration. Also the appellant never physically examined the goods and had no access to technical details of aircraft parts. It is therefore argued that there was no negligence on part of the appellant. The appellant further claims that violations of CBLR, 2018 cannot result in penalty under Section 117 of the Customs Act cannot be imposed alleging violation of the provisions of Customs Broke