The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under Section 112(a) of the Customs Act, 1962, against the Customs House Agent (CHA) on the clearance of an imported vessel without any misclassification. J. M. Baxi & Co., the appellant assessee, were appointed as Customs House Agents (CHA) by the importers and owners of the vessel “Pride of Goa” by importing company M/s. Goa Coastal Resorts & Recreation Pvt. Ltd., and the assessee, on the basis of the documents supplied by the importer, filed a bill of entry for clearance of the imported vessel.
The assessee appealed against the order passed by the adjudicating authority for confirming the penalty of Rs. 5,00,000/- imposed on the assessee under Section 112(a) of the Customs Act. Chandrashekhar R. Gupta, the counsel for the assessee, contended that since the matter has already been decided in favor of the importing firm and its director, the cause of imposing a penalty against the Custom House Clearing Agent gets extinguished and there is no justification for imposing a penalty on the assessee anymore.
P. Ganesan, the counsel for the department, relied on the decisions made by the lower authorities and contended that the assessee was liable for the misclassification or misdeclaration of the imported vessel, and the penalty against the assessee was as per the law and liable to be sustained.
The Bench observed that in the case of Collr. of Central Excise, Kanpur v. Flock (India) P. Ltd., the court held that the duty of the importer was to give the correct and detailed description that had been discharged, and the importer’s goods are also subjected to exemption before allowing it out of charge. A single-member bench comprising C. L. Mahar (technical) held that since the cause of imposing the penalty against and the present assessee does not exist anymore, and we quashed the penalty imposed against the assessee.