2005 PLP (Trib (PTD)

2. According to the facts available on record, the appellant who happens to be a Customs Clearing Agent in terms of section 207 of the Customs Act, 1969, filed a bill of entry for release of glossy colour paper, etc. under first appraisement system. The appellant had submitted bill of entry on the documents of imports supplied by the importer, the goods were examined and assessed to customs duty and taxes by the appropriate officers of the Customs and were allowed out of charge. Thereafter, as a result of a reassessment made by the Appraisement Intelligence Branch, the importer paid the short-levied amount of customs duty and taxes.

3. The appellant, however, received a show-cause notice on 15-11-2003 whereby he was charged for mala fide and collusion with importer with the intention to defraud the Government. The appellant denied these charges by stating that:-- (a) the assessment, was completed by the appropriate officer under section 80 of the Customs Act, 1969 and that too on the basis of first appraisement, hence neither there was any qualified declaration in terms of Customs Law nor for any such act the provisions of section 32 were applicable; and (b) there is no evidence on record that a mens rea or at least a guilty knowledge exists and unless this ingredient is established no conviction can take place.

4. However, in spite of said pleadings, the respondent .did not agree with his point of view and passed the impugned order. Hence the present appeal.

5. The learned counsel appearing on behalf of the appellant has reiterated the same arguments as put forward before the respondent. On the other hand, the respondent pleads that the appellant was actively involved with the importer to cheat the Government. He was confronted to show the evidence linking the appellant with any specific charge. To that he relied upon on the bill of entry where instead of China, the word, "Japan" was typed and that is an allegation stated in the show-cause notice. But the supporting documents namely invoice, etc. clearly show that goods were of Chinese origin and that was a typographical error on the part of the appellant.

6. The rival parties have been heard and case record has been examined. It is an admitted position that the bill of entry was filed under first appraisement system, and the goods were assessed after examination by the appropriate officer and were given out of charge. At that stage another branch of the Customs House re-examined the, goods and found that goods were short assessed, and on demand short assessed duty was paid by the importer.

7. So far so good, but at a later stage and that too after the, release of goods a show-cause notice for misdeclaration was served on the appellant in spite of the fact that the clearance entry was assessed under first appraisement system meaning thereby that there was no untrue statement Whatsoever made by the importer to attract the mischief of section 32 of the Customs Act, 1969. In such circumstances, issuance of show-cause notice for confiscation of goods was ab initio wrong as within the framework of section 32 no untrue statement was ever made either by the importer or by the agent. The facts clearly lead to the conclusion that, if any mischief was done, it was the Assessing Officer who should have been, guilty for making a wrong assessment. Rather doing that, irony is, that the agent and importer were held responsible.

8. A perusal of sections 207, 208 and 209 of the Customs Act, 1969, indicates that an agent represents his principal and unless by direct evidence it could be shown that he was committing some criminal activity and for that there existed mens rea or at least a criminal intent, he cannot be penalized under the general provisions of the Customs Act, 1969, however, if such an agent violates the governing conditions of his licence, he may be proceeded within the framework of licensing miles for the violations he commits. But unfortunately, in the present case there is nothing on record to corroborate any of his act to establish mens rea or at least a guilty knowledge. This is not a case of absolute liability nor can the proposition propounded by the respondent that an agent must necessarily, be fixed with the knowledge of fraud of his principal merely because he presents documents on his behalf can be accepted.

9. There is no duty cast on an agent to carry out an indepen dent investigations before filing the documents with the Customs. It is preposterous to suggest that merely because an agent picked up documents for release of goods he must have some guilty knowledge.

10. It was the duty of prosecution, if they wanted to rope in the agent; to prove by some cogent reasons that the agent was an associate of those who were guilty of making an untrue statement before the Customs. In the absence of such evidence, this Tribunal is unable to agree with the prosecution's proposition. The mere filing of the release documents, by no means, sufficient to make out a case for imposition of penalty.

11. Having said that, the impugned order to the extent, it relates to the present appellant is set aside. The impugned order is modified accordingly. H.B.T./258/Tax(Trib.) Order accordingly.