Commissioner of Customs vs Vaz Forwarding Ltd.

Harsha Devani, J.—This appeal is preferred against a consolidated order made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) in an order passed in three appeals being Appeal No. C/187-189/2009. Since a common appeal has been filed in relation to all the three parties, this appeal is treated as an appeal preferred against Respondent No. 1 - M/s. Vaz Forwarding Limited.

The Commissioner of Customs, Kandla in this appeal u/s 130 of the Customs Act, 1962 has challenged order dated 27th July, 2009 made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following two questions:

(1) Whether in the facts and circumstances of the present case, the Tribunal was justified in holding that confiscation of goods u/s 111[m] and imposition of penalty u/s 112[a] of the Customs Act, 1962 upon the Respondent CH As was neither justified nor warranted despite there being undisputed in clearing the goods against bogus/fictitious Advance Licenses and violation of the provisions of the Customs Act, 1962?"

(2) Whether mens rea is essential for imposition of penalty u/s 112(a) of the Customs Act, 1962 in the facts and circumstances where goods are undisputedly rendered liable for confiscation under the provisions of Section 111 of the Customs Act, 1962 and whether in the facts and circumstances of the present case, the Tribunal was justified in allowing the party''s appeal?

The facts of the case stated briefly are that vide order dated 27th February, 2009, the Commissioner of Customs, Kandla imposed penalty of Rs. 2 lakhs on the Respondent, a Customs House Agent u/s 112(a) of the Act. Being aggrieved, the Respondent preferred appeal before the Tribunal who set aside the penalty.

Ms. Amee Yajnik, learned Senior Standing Counsel appearing on be-half of the Appellant has assailed the impugned order by placing reliance upon the reasoning adopted by the adjudicating-authority.

As can be seen from the impugned order of the Tribunal, the Tribunal after appreciating the evidence on record has recorded the following findings:

As is seen from the above, there is no direct evidence on record to show that the said Appellants were aware of the fact of the advance licences being bogus and forged. There may be some contravention as regards following procedure envisaged in the Customs House Licensing Rules, but there is virtually no evidence to show any knowledge on the part of the Appellant about the forged advance licences. Even the officers cleared the goods against said licences and it is only subsequently on investigation that these licences were found to be forged and bogus. Under these circumstances, I find no justifiable reason to impose the penalties imposed upon the Appellants. The same are, accordingly, set aside and appeals allowed with consequential relief to them.

Thus, it is apparent that the Tribunal after appreciating the evidence on record has found that there was no direct evidence on record to indicate that the Respondent was aware of the fact that the advance licences were bogus and forged. The Tribunal has also found as a matter of fact that though there was some contravention on the part of the Assessee in following the procedure envisaged under the Customs House Licensing Rules, there was no evidence on record to show any knowledge on the part of the Respondent that the advance licences in question were forged. It is in the light of the aforesaid findings recorded by the Tribunal that the Tribunal has held that there was no justifiable reason to impose the penalties on the Respondent.

On the findings of fact recorded by the Tribunal, it is not possible to state that the conclusion arrived at by the Tribunal is in any manner unreasonable so as to warrant interference. The impugned order being based upon findings of fact, therefore, does not give rise to any question of law much less, a substantial question of law.

The appeal is, accordingly, dismissed.