Penalty on CHA for Not Verifying Export Credentials: CESTAT Sets

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Chennai has set aside a penalty imposed on a Customs House Agent (CHA) for failing to verify the credentials of an exporter. The tribunal ruled that such a lapse should be dealt with under the specific provisions of the Customs House Agents Licensing Regulations (CHALR), 2004, and not by imposing a penalty under the Customs Act, 1962. The case involved the attempted illegal export of red sanders, where the CHA was accused of negligence. The CESTAT observed that while the CHA may have failed in their due diligence, there was no evidence of their direct involvement or collusion in the smuggling attempt. Therefore, the tribunal concluded that it was a procedural violation of the licensing regulations rather than an offense under the Customs Act itself, thereby quashing the penalty.