The Madras High Court (HC) has held that the Order passed by Settlement Commission cannot be adjudicated by co-noticees, Customs duty over CHA is not imposable.
Mr Hari Radhakrishnan appeared on behalf of the appellant and Mr R.Nandha Kumar appeared on behalf of the respondent.
A.M.Ahamed & Co.,the Customs House Agent (‘CHA’) filed appeal under Section 130 of the Customs Act, 1962, challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal(CESTAT), dated 16.02.2016 which confirmed the order passed by the Commissioner (Appeals), dated 28.04.2011.
The appellant in his capacity as CHA filed a bill of entry at Tuticorin port on 16.11.2009 on behalf of the importer M/s.I.Tech Imports and Exports, Chennai so as to get used plastic injection mould machines cleared by the customs. The value that was declared by the importer was SGD28500. The customs got the goods value by the Chartered Engineer as SGD44600. On payment of the customs duty, the goods were also duly cleared.
The office of the Directorate of Revenue Intelligence conducted a raid on the office premises of the importer based on information received that the machines are imported by misdeclaring the country of origin to evade antidumping duty.
A show cause notice was issuedinitiating penalty under Sections 112(a) and 114A of the Customs Act for undervaluation to the importer and also tothe appellant. The Additional Commissioner of Customs imposed a penalty against the appellant for conniving with the importer in misdeclaring the value of the goods.
On appeal, the Commissioner of Customs (Appeals) rejecting the appeal, but however, the penalty was reduced from Rs.3,00,000/- to Rs.2,20,000/-. It was argued before the Commissioner (Appeals) that an order passed by the Settlement Commission, dated 09.11.2010 exist whereby the importer paid the additional amount of customs duty and he was granted immunity from prosecution, fine and penalty.
The Division Bench considered the order passed by the Settlement Commission and concluded that when the importer had escaped liability, the CHA cannot be mulcted with a liability and the benefit has to ensure in favour of the CHA also. Accordingly, the writ appeal came to be dismissed by an order dated 02.07.2015.
It was observed by the HC that once an order of settlement is passed by the Settlement Commission, the case cannot be adjudicated by other co-noticees. Further observed that if the proceedings against the importer have come to an end, it will be discriminatory and unfair to continue the proceedings against the CHA in relation to the very same transaction.
The order of the Customs and Central Excise Settlement Commission, dated 30.11.2010 granting immunity to the importer from prosecution, fine and penalty, will also ensure the benefit of the appellant.
The HC bench comprising Justice M S Ramesh and Justice N Anand Venkatesh held that the appellant is not liable to pay any penalty and set aside the order passed by the Customs, Excise and Service Tax Appellate Tribunal, (CESTAT), dated 16.02.2016.
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