By TIOL News Service

NEW DELHI, NOV 12, 2015: DRI booked a case of import of high-end luxury cars from foreign suppliers by mis-declaring them as new, although they were old and registered in the country of export prior to their import into India and thus were second hand cars. It was also found that the cars were under invoiced. These cars were being imported by one SumitWalia. In this case, the appellant was the CHA on whom penalty has been imposed on the ground of facilitating the said illegal imports in violation of the provisions of the CHALR, 2004.

In their appeal before CESTAT, the appellant submitted that (i) it was not concerned with the activities of SumitWalia and his associates and the fraudulent activities attributed to it were undertaken by G.S. Prince (who was its employee and G-card holder) in his personal capacity and without its knowledge. (ii) In another case involving identical/similar facts, the appeal has been allowed vide CESTAT Final Order Nos.55023-55024, dated 17.12.2014 essentially on the ground that the appellant was unaware of the activities of its G card-holder G.S. Prince , who was acting in his personal capacity for his personal benefit. (iii) The appellant's statement was never recorded. (iv) There is no evidence that the appellant was aware of the activities of G.S. Prince .

The AR submitted that (i) G.S. Prince was a 'G' card-holder of the appellant and, therefore, the appellant cannot escape its responsibility (ii) It has been held by the High Court of Delhi in the case of Jasjeet Singh Marwaha Vs. Union of India = 2009-TIOL-87-HC-DEL-CUS & Karnataka High Court in Clear Fast Services Pvt. Ltd. that in the circumstances penalty on the CHA can be imposed.

The Bench observed that G.S. Prince had admitted in his statement that he acted in his personal capacity and the appellant CHA was not aware his activities in this regard; the appellant's statement was never recorded and there is no evidence to suggest that the appellant was aware of the activities of G.S. Prince .

Noting that in a similar matter, on the basis of similar evidence, the Bench had allowed that appeal on the ground that there was no evidence to prove the involvement of the appellant and that the employee had suomotu acted for his personal greed beyond the scope of duty and, therefore, the employer cannot be penalized, the Tribunal held that in the present case too no evidence had come on record indicating that the appellant had authorised G.S. Prince , expressly or impliedly.

After distinguishing the case laws cited by the AR, the Bench set aside the penalties imposed and allowed the appeals.

(See 2015-TIOL-2400-CESTAT-DEL)