GLORY AGENCIES Vs. COMMISSIONER OF CUSTOMS (SEAPORT-EXPORTS)

JUDGEMENT

(1.) THE brief facts of the case are that M/s. Global Exports obtained two Advance Licences dt. 8.8.2001 and 13.2.2001 under the DEEC scheme for import of upholstery fabrics without payment of Customs duty against export of seat covers made out of duty -free materials, and cleared 5 consignments of upholstery fabrics without payment of duty on executing two bank guarantees dt. 10.10.01 & 20.2.01; verification revealed that the bank guarantees were fake as the Indian Bank, Thiruvanmiyur Branch, Chennai, who supposedly issued the bank guarantee, informed the department that the bank guarantee was not issued by their branch. It was found that one Shri Mohammed Zackria and others had entered into criminal conspiracy, defrauded the exchequer by floating fictitious firms, obtaining DEEC licences, submitting fake bank guarantees to the department and also disposing of duty -free imported goods in the local market in contravention of the Customs Notification and EXIM Policy. Global Exports, proprietary concern of Shri Syed Rafi Ahmed was found to be fictitious. Shri Zackria admitted that he had introduced Global Exports to Indian Bank and that he sold the goods which were imported by Global Exports. On the basis of the above investigations, a show -cause notice dt. 17.3.2003 was issued, inter alia, proposing imposition of penalty upon the present appellant who is a CHA for submission of fake bank guarantees and acting as agent of Global Exports, a fictitious firm, with the Customs department without any written authorization and allowing consignment imported under actual user DEEC licences to be transported to premises other than the factory premises of the importer. The notice was adjudicated by the Commissioner, who imposed a penalty of Rs. 50,000/ - on the CHA. Hence this appeal.

(2.) I have heard both sides. Shri Mohammed Zackria approached the CHA holding himself to be the proprietor of Global Exports and on furnishing of the import documents, the CHA filed the Bill of Entry and also handed over the bank guarantees furnished by the importers for the clearance. The appellants had no knowledge or reason to believe that the bank guarantees were fake. After clearance, they handed over the goods to M/s. Balaji Roadlines, transporters thereof. Their responsibility ceases on handing over the goods to the transporters and they cannot be expected to have knowledge as to what happened to the goods after handing them over to the transporters. The signature of the importers on the Bill of Entry is sufficient compliance of the obligation on the part of the CHA to get authorization, as held by the Tribunal in P.P. Dutta v. CC New Delhi, 2001 (136) ELT 1042. There is no material on record which brings out any commission or omission on the part of the CHA so as to render the goods liable to confiscation and the CHA liable to penalty under Section 112(a) of the Customs Act, 1962. I, therefore, set aside the penalty imposed on the appellant and allow the appeal.