Customs, Excise and Gold Tribunal - Bangalore
Natwar Parikh Industries And Ors. vs The Commissioner Of Customs on 6 September, 2005
Equivalent citations: 2006(104)ECC447, 2006ECR447(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
Page 448
1. These appeals have been filed against OIO No. 5/98 dated 28.5.99 passed by the Commissioner of Customs Bangalore. The brief facts of the case are as follows:
2. The Customs officers detected a case where a container which was supposed to carry mulberry raw-silk fabrics and other goods meant for Page 449 export to Singapore was intercepted by the interested parties who after examination, clearance and sealing of the containers while transporting the container from ICD Bangalore to Chennai Port by road and replaced the goods with 15 numbers of empty water tanks of capacity 1000 ltrs. The appellant M/s Natwar Parikh Industries supplied the said container. Show cause notices were issued to various persons involved in the fraud. The container supplied by the appellant was affixed with OTL (One Time Lock) No. 10506 initially. It is seen that on a request from one Shri Johnson Abraham, (Shri B. Seenuvasan Branch Manager of M/s Natwar Parikh Industries broke open the OTL 10506 and replaced it by OTL No. 00470. The replacement of OTL was done without informing the Customs Authorities. In view of the above, the adjudicating authority held that the container is liable to confiscation under Section 118(b) of the Customs Act 1962. At the time of provisional release, a Bank Guarantee for Rs. 25,000/- was given. The adjudicating authority has enforced the bond to the extent of Rs. 25,000/-. He has also held that Shri B. Seenuvasan branch manager, M/s Natwar Parikh Industries is liable to penal action under Section 114 of the Customs Act. M/s Natwar Parikh and Shri Seenuvasan have challenged the finding and order of the adjudicating authority. As far as Seenuvasan is concerned, the Commissioner has imposed a penalty of Rs. 50,000/- under Section 114. The appellants pleaded that they did not commit any offence and the enforcing the bond to the extent of Rs. 25,000 and imposition of penalty of Rs. 50,000/- on Shri B. Seenuvasan is not in order. The appellant company changed the seal at CONCOR only with the knowledge of the surveyors. The changed seal was recorded in CONCOR Vehicles Outward Register as confirmed in the voluntary statement of CONCOR official Mr. Raghuraman. There is no known procedure of customs which prescribes change of seal before dispatch of the cargo from the custody of ICD.
3. As per Section 114 of the Customs Act, the penalty is leviable only if the appellant had been guilty of the offence or guilty of abetting offence. But the voluntary statement of all individuals interrogated by Customs had not pointed any accusing finger against this appellant. Since the seal was changed at CONCOR (ICD) Bangalore only, the appellants shri Seenuvasan contended that he had not committed any breach of known procedure laid by the customs. He rightly followed the same procedure for changing the seal as he followed the procedure for affixing the first time seal.
4. The adjudicating authority has given the following findings with regard to the role of M/s Vikram Associates Pvt. Ltd., Bangalore and the very fact that goods have been pilfered in transit proves that as handlers and forwarders M/s Vikram Associates Pvt. Ltd., have failed in their responsibility of safe transit of goods to port of export.
M/s Vikram Associates Pvt. Ltd., are the authorized handling and transportation contractors of M/s CONCOR for safe transport of the containers containing the export cargo which have been cleared after Customs examination from ICD, Bangalore. In the instant case, M/s Vikram Associates Pvt. Ltd., have failed to transport the container containing the export goods of M/s Prajwal Exports cleared after Customs examination Page 450 from ICD, Bangalore to Chennai Port for onward dispatch to Singapore, Shri B.V. Sumanth, Manager of M/s Vikram Associates Pvt. Ltd., in his statement dated 19.09.97 has admitted that they have not collected any surety or bond from the owner of the trailer TMD-8075 and hence they are also responsible for the pilferage of the export cargo from the container No. TOLU- 273361-0. Thus, M/s Vikram Associates Pvt. Ltd., are liable for penalty under the provisions of Section 114 (i) of the Customs Act, 1962. In their reply, they have stated that they are not involved in the fraud, that they have stated that they handle container going by road, that the trailer are used only when demanded and not regularly and hence no Bond or Bank Guarantee is taken from the trailer owner, that the trailers are allotted on first-come-first serve basis, that in the instant case, the container was allotted to trailer TMD 7580 , that they were not aware that they were manipulated by Shri Johnson P. Abraham due to which the export containers of M/s Prajwal Exports, got allotted to the trailer TMD 7580, that since the goods had been recovered there is no loss of revenue and hence they are not liable for the actions of M/s Prajwal Exports, that no penalty be imposed. M/s Vikram Associates Pvt. Ltd., are responsible for the safe transit of the goods. They cannot claim that as the goods have been recovered they have no liability. Had the case not been detected, there would have been substantial loss of revenue. The very fact that goods have been pilfered in transit proves that as handlers and forwarders, M/s Vikram Associates Pvt. Ltd. have failed in their responsibility of safe transit of goods to port of export. They are therefore responsible for penal action under Section 115 of Customs Act 1962.
They are therefore responsible for penal action under Section 114 of the Customs Act. A penalty of Rs. 50,000/- has been imposed under Section 114 on M/s Vikram Associates. M/s Vikram Associates have pleaded that the allegation in the show cause notice is that they have abetted the commission of the offence by Prajwal Exports Ltd. Bangalore but the finding is that they have failed in their responsibility of safe transit of goods to the port of export. It has been contended that the finding of the adjudicating authority has not established the charge mentioned in the show cause notice. Hence on this point alone, the penalty is liable to be set aside.
5. Shri Venkatesh learned advocate appeared on behalf of Natwar Parikh Industries and Shri B. Seenuvasan. As Regards M/s Vikram Associates, they requested to decide the issue on the basis of the facts on record and their written submissions.
6. We have gone through the records of the case carefully. M/s Natwar Parikh Industries supplied the container to the exporter Shri B. Seenuvasan, the Branch Manager of M/s Natwar Parikh Industries. The Commissioner has given his finding in respect of these two appellants in para 47-P. No doubt the container has been substituted with some fake goods when the same was supposed to carry silk fabrics. Section 118(b) reads as follows:
Where any goods are brought in a package within the limits of Customs Area for the purpose of exportation and are liable to confiscation, the Page 451 package and other goods contained therein shall also be liable to confiscation.
The adjudicating authority has stated that the change of OTL and non-intimation of the same to the Customs Authorities has resulted in facilitating of the clandestine removal of transit goods. Further they have also not followed any procedure for regulation of the OTLs being used by them. The finding of the adjudicating authority that the change of OTL without informing Customs Authorities is not correct cannot be faulted with. Hence, the finding that the container is liable to confiscation is sustainable. The same is upheld. The enforcing of the bond to the extent of Rs. 25,000/- is also upheld. As regards the penalty on Shri B. Seenuvasan, Branch Manager we feel that there is a clear lapse on his part to have changed the seal without the knowledge of the Customs. This has facilitated the clandestine removal of goods from the container thereby enabling the concerned person to perpetrate an export fraud. Hence, the penalty under Section 114 on Shri Seenuvasan is justifiable. However, in the facts and circumstances of the case, it. would be in the fitness of things if the penalty on Shri Seenuvasan is reduced to Rs. 10,000/- only.
7. As regards M/s Vikram, the finding of the adjudicating authority is that they have failed in their response of safe transit of goods to port of export. On this count, it would be very difficult to sustain penalty under Section 114 of the Customs Act. There is no evidence that they have abetted the illegal export in the present case. Hence penalty on M/s Vikram Associates Pvt. Ltd., is set aside. Appeal No. C/390/99 in respect of M/s Natwar Parikh Industries is dismissed. The appeal of Shri Seenuvasan is partially allowed by reducing the penalty and appeal of M/s Vikram Associates is allowed.
(Pronounced in open Court on 6 SEP 2005)