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Judgment
A Show Cause Notice dated 02.07.2018 was issued on the allegation of attempted smuggling of imitation jewellery raw material glass beads (Chatons) in the guise of clearing glass show piece/scrubbers/foot wear, to the appellant herein. It is alleged that the consignment in question in Container No. MSKU5268687, which was awaiting examination, was registered for examination at the appellant's warehousing premises on 16.12.2016, but it appears that the Customs Broker did not turn up, which was thereafter referred to Docks Intelligence Unit ('DIU' for short) for investigation, during which time it is alleged that various discrepancies were noticed as regards the name of company, consignee, etc. It is also alleged that an attempt to smuggle was made by persons of M/s. Raj Brothers Shipping Pvt. Ltd.; and that two persons viz. Mr. Balaji and Mr. Karthikeyan, who had appeared, had thereafter absconded. In the backdrop of the above, it was proposed against the appellant herein that since the appellant was responsible for controlling the entry of persons, etc., but the personnel of the appellant were not verifying the identity cards of the persons, according to the Revenue, the same had resulted in violation of Regulation 5(1)(i)(n) of the Handling of Cargo in Customs Areas Regulations, 2009, penalty as also cancellation of Public Notices.
1.2 Upon adjudication, the Principal Commissioner of Customs, Chennai-VIII vide impugned Order-in-Original imposed a penalty of Rs.50,000/- for violation of Regulation 5(1)(n), but however, withdrew the other proposals in the Show Cause Notice.
Heard Dr. R. Sunitha Sundar, Learned Advocate appearing for the assessee-appellant and Ms. T. Usha Devi, Learned Departmental Representative appearing for the Revenue.
3.1 The very Show Cause Notice contains serious allegations of attempted smuggling against various persons. Admittedly, there is no allegation against the appellant herein as to whether he had any role or was involved in abetting the commission of the alleged smuggling activity. Regulation 12 ibid. prescribes the procedure for suspension or revocation of approval and imposition of penalty and here, the penalty has been imposed under Regulation 12(8) of the Regulations ibid. for alleged violation of Regulation 5(1)(i)(n). Regulation 12 incorporates the procedure, right from issuance of Show Cause Notice, reply thereto by the Customs Cargo Service Provider, an enquiry by the Assistant Commissioner or Deputy Commissioner, right to cross-examination and thereafter, a report of the enquiry by the Assistant Commissioner or Deputy Commissioner, as the case may be. Then, the Commissioner may, after considering the report of enquiry and reply/representation, if any, on the enquiry report by the Customs Cargo Service Provider, pass such orders as he deems fit.
3.2 The Show Cause Notice and the impugned Order-in-Original allege that Regulation 5(1)(i)(n) was violated. Sole allegation in the Show Cause Notice as well as the Order-in-Original is that the two persons who appeared on a particular day, had absconded, whose identity was not established by the appellant herein. The discussion in the Show Cause Notice as well as the impugned order points out that during examination, the persons were present, who later on absconded, which per se would not tantamount to breach of Regulation 5(1)(i)(n) because, there is nothing on record to suggest that they had gained unauthorized access into the premises. It is admitted that they had presented themselves on being called for examination, were also within the reach of the officers, who only later on absconded and this would not amount to unauthorized access into the premises. In any case, it is not the case of the Department that those two persons had gained unauthorized access and that the appellant had helped in any way, in accommodating the unauthorized access or exit from the scene.
There is otherwise no allegation by the Revenue as to security and access control and therefore, I am of the view that the penalty cannot be sustained.
In view of the above discussion, the impugned order is set aside and the appeal stands allowed.
(Order pronounced in the open court on 05.08.2021)