Order date – 14 November 2022

 Facts –

• The Appellant, A.M.Ahamed & Co in his capacity as Customs House Agent filed a bill of entry on behalf of the importer M/s. I.Tech Imports and Exports, Chennai so as to get used plastic injection mould machines cleared by the customs.
• The value that was declared by the importer was SGD28500. The customs got the goods value by the Chartered Engineer as SGD44600. On payment of the customs duty, the goods were also duly cleared.
• On the basis of information received to the effect that the machines are imported by misdeclaring the country of origin to evade antidumping duty, the office of the Directorate of Revenue Intelligence conducted a raid in the office premises of the importer. A case came to be registered for undervaluation against the importer. Accordingly a show-cause notice was issued for undervaluation. Thereby the goods were confiscated and imposed penalty.
• Aggrieved appellant had filed an appeal

Issue –

• Whether the appellant is liable to pay penalty on misdeclared imported goods?

Order –

• The Hon’ble High Court relied on the documents that were seized from the importer which contained two sets of invoices for the same goods, it came to a conclusion that the CHA, having knowledge of undervaluation of goods did not properly guide the importer to comply with the provisions of the Customs Act and Rules made thereunder. Accordingly, the penalty was imposed against the appellant.
• It is clear from the order of the Tribunal that it did not consider any of the grounds raised by the appellant including the order passed by the Settlement Commission. In view of the same, the order of the Tribunal must be held to be perverse.
• Relying on the decision of the Apex Court in Union of India (UOI) and Ors. vs. Onkar S. Kanwar and Ors. reported in 2002 (145) ELT 266 (S.C.) wherein it is held that where the benefit has been granted under the Samadhan Scheme to the main party, that benefit must also enure in favour of the other co-noticees and it would be unreasonable and discriminatory if the benefit is not extended. In present case the license of the CHA was cancelled, the court held that when the importer had escaped liability, the CHA cannot be mulcted with a liability and the benefit has to endure in favour of the CHA also.
• The effect of the settlement mechanism that has been provided in the Samadhan Scheme that was dealt with by the Apex Court in the judgment referred supra, will equally apply when an order is passed by the Settlement Commission. In this case, the Settlement Commission found that the importer had made true and full disclosure of all the facts relating to imported goods. The order of the Customs and Central Excise Settlement Commission, granting immunity to the importer from prosecution, fine and penalty, will also enure to the benefit of the appellant.
• Hence the appeal is allowed.