Judgment:
1. M/s. Lee & Muirhead Ltd., are the appellants in this case (hereinafter referred to as 'CHA'. The CHA is aggrieved by the order of the Commissioner of Customs imposing on them a penalty of Rs. 10,000/- under Section 117 of the Customs Act, 1962.
2. Examined the records and heard both sides. M/s. Uptron Colour Picture Tubes Ltd. (hereinafter referred to as 'importers') had imported a consignment of components of colour picture tubes from Japan under five invoices and had filed Bill of Entry No. 101056, dated 21-1-98 through the CHA for clearance of the goods. The Bill of Entry was assessed to duty of Rs. 21,58,662/- on the basis of the importers' declaration and the same was paid by the importers on 5-2-98 and the goods were cleared. Subsequently, the importers found certain discrepancy in the Bill of Entry, which was found to have crept into the document from one of the five invoices. That was a discrepancy relating to the value of the goods covered by the said invoice. The importers intimated this error to the CHA and the latter advised the former to intimate the same directly to the Customs authorities. The importers did likewise. In their letter dated 19-5-98 addressed to the Asstt. Commissioner of Customs, the importers requested the Asstt.
Commissioner to amend the Bill of Entry so as to enable them to pay the duty of customs short-paid. The Asstt. Commissioner acceded to the request and reassessed the Bill of Entry. The differential duty of Rs. 2,37,950/- consequential to the reassessment was paid by the importers through the CHA on 19-6-98. Two months later, the department recorded a statement of the Dy. General Manager of the CHA under Section 108 of the Customs Act, 1962, wherein the' Dy. General Manager submitted that the discrepancy had occurred due to a clerical mistake on the part of the CHA's office staff. The Dy. Commissioner of Customs, in his letter dated 4-9-2000, communicated Commissioner's warning to the CHA that, if lapses of this nature would occur again in future, a serious view would be taken against them. Later on, the CHA, to their dismay, received a show-cause notice dated 1-2-2001 sent by the Commissioner of Customs.
That notice proposed, inter alia, to impose a penalty on the CHA under Section 112 of the Customs Act. The proposal was contested. In adjudication of the dispute, the Commissioner imposed a penalty of Rs. 10,000/- under Section 117 of the Customs Act on the CHA, apart from confirming the aforesaid differential duty with interest against the importers. Hence the present appeal of the CHA.3. Ld. Counsel, Shri L.P. Asthana for the appellants, submits that the penalty of Rs. 10,000/- has been imposed on the CHA under Section 117 of the Customs Act, even though there was no proposal in the show-cause notice to impose any such penalty. Ld. Counsel has, further, cited the provisions of Section 117 and has submitted that none of the requirements for imposition of a penalty under that section has been held to have been satisfied in the present case. The only finding recorded by the Commissioner against the CHA is that the delayed payment of the differential duty of over Rs. 2,00,000/- was due to the lapse on the part of the CHA. He further submits that no penalty under Section 117 can be sustained in the absence of a finding that the CHA contravened any provision of the Customs Act or abetted somebody else's contravention or failed to comply with any requirement of law. The Commissioner has attributed the delay of payment of differential duty, to the CHA. Such a finding is also not sustainable inasmuch as the lapse was duly taken note of by the Customs authorities earlier and the Commissioner had condoned the same with a warning for the future. Once the lapse was condoned, it did not survive to attract any penalty.
Apart from levy of interest, there was no provision in the Customs Act to impose penalty on any person on the ground of delay of payment of duty of customs. Ld. Counsel further submits that the proposal in the show cause notice for im posing penalty on the CHA under Section 112 has been dropped by the Commissioner. He prays for setting aside the penalty and allowing therap- peal. ' 4. Ld. JDR, Shri Hitesh Shah submits that, under the CHA Licensing Regulations 1984, the CHA was under an obligation to ensure that the differential duty resulting from the reassessment was paid without any delay. He submits that the CHA has no case that he had advised his client to take urgent steps for payment of the differential duty. In these lines. Id. DR wants the penalty to be sustained.
5. I have examined the submissions. As rightly submitted by Id.
Counsel, the proposal in the show-cause notice for penalising the CHA was under Section 112 of the Customs Act. All the allegations in the show-cause notice as against the CHA were in support of such proposal.
These allegations are contained in Para 9 of the notice. The adjudicating authority has dropped the proposal for confiscation of the goods under Section 111 and for penalty under Section 112 of the Customs Act. The above allegations, which stood rejected with the dropping of the proposal for confiscation and penalty, did not survive for any other purpose, let alone a penalty under Section 117. The Commissioner had condoned the CHA's lapse and exonerated them after warning them for the future. Having done so, it was not open to him to proceed against the CHA on the same set of facts and allegations. I further observe that, as rightly submitted by Id. Counsel, there was no proposal in the SCN to impose penalty on the CHA under Section 117., Even otherwise, none of the requirements of Section 117 is found to have been held against the CHA in the impugned order. In order to invoke that provision of law against the CHA, there should have been a finding that they had contravened some provision of Act or abetted somebody else's contravention of such provision or failed to comply with the mandatory requirements of any provision of the Customs Act.
There is no finding of this sort in the impugned order. The only finding recorded by the Commissioner is that the delay of payment of differential duty by the importers was due to the CHA's lapse. As I have already noted, this lapse had been condoned by the competent authority. Any delay involved in the payment of differential duty has been taken care of in the levy of interest under Section 28AB of the Customs Act. Delayed payment of duty by an importer cannot be a ground for imposition of penalty on his CHA under Section 117 of the Customs Act.
6. In view of the above, the penalty imposed under Section 117 of the Customs Act on the CHA cannot be sustained. I set aside the impugned order as against the CHA and allow the present appeal with consequential reliefs to them.