EXAMINATION STAFF OF THE CUSTOMS BROKER ALSO RESPONSIBLE FOR MISDECLARATION AND SMUGGLING ???

 An importer was indulging into smuggling of goods by mis-declaration of description, nature and quantity of the goods. The customs officials detained one container for examination. They found that mis declared cargo also loaded in the container and few are Prohibited too.

After completion of investigation and enquiry, the Department had issued show cause notice  on the allegation that Customs broker and their employees also  parties to the crime. One among the CB employee is a “H” card holder who  used to attend the examination of the container and get the container resealed after examination. The allegation made by department is that that ‘H” card holder also acted in collusion with the kingpin of the smuggling racket by his act of omission and commission and facilitated the attempt to smuggle.

Penalty was imposed on the CHA company and its employees under Section 112(a) of the Act at ₹ 1 lakhs each. The question what we are discussing here is only, whether CB examination & delivery employee also punishable u/s 112(a) ?

 

We are discussing this topic in limited manner, only to the extent of “H” card holder’ s involvement in the case. Hence below answer is limited to field staffs who are innocent.

In  the given illustration, CB employee was not aiding and abetting the crime. An employee of the CB company is working as per the instructions given by his employer.

There is no proof made out of any abnormal gain by CB employee to indicate any collusion or abetment on his part with the importer of the consignment under dispute.

Penalty has been imposed mechanically without application of mind. Accordingly the penalty imposed under Section 112 (a) of the Customs Act has to be set aside.

 

RAJESH GABA VERSUS COMMISSIONER OF CUSTOMS (IMPORT) CESTAT NEW DELHI decided on September 10, 2020

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