Custom, Excise & Service Tax Tribunal
Basant Global Trade Pvt Ltd vs Mundra on 13 June, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No. 10209 of 2022
(Arising out of OIA-MUN-CUSTM-000-APP-329-21-22 dated 21.03.2022 passed by
Commissioner of Customs-Ahmedabad)
M/s Basant Global Trade Pvt Ltd ...Appellant
Basant House, Near Jain Temple,
Behind Navrangpura Post Office,
Navrangpura, Ahmedabad 380 009
VERSUS
C.C. Mundra ...Respondent
Office of the Principal, Commissionerate of Customs, Port User Buld.
Custom House, Mundra, Gujarat-370421 AND Customs Appeal No. 10210 of 2023 (Arising out of OIA-MUN-CUSTM-000-APP-330-21-22 dated 21.03.2022 passed by Commissioner of Customs-Ahmedabad) Praveen Bhatt & Sons ...Appellant nd R.K. House, Office No. 5, 2 Floor, Plot No. 320, Sector 1A, Gandhidham-370 201 VERSUS C.C. Mundra ...Respondent Office of the Principal, Commissionerate of Customs, Port User Buld.
Custom House, Mundra, Gujarat-370421 APPEARANCE:
Shri Uday M. Joshi Advocate with Shri Vikas Mehta, Consultant appeared for the Appellant Shri H.P. Shrimali, Superintendent (AR) appeared for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No.__11294-11295_/2024 DATE OF HEARING: 09.04.2024 DATE OF DECISION:13.06.2024 RAMESH NAIR The present appeals are filed by M/s Basant Global Trade Pvt. Ltd. (Appellant No.1) and M/s Pravin Bhatt & Sons (Appellant No.2) against the Order-In-Appeal No. MUM-CUSTM-000-APP-329 to 330-21-22 dtd. 21.03.2022 passed by the Commissioner (Appeals), Ahmedabad.
2. Briefly stated, the relevant facts of the case are that Appellant No.2, a customs broker presented Shipping Bill No. 5573040 dtd. 21.04.2017 on behalf of the Appellant No.1 (Exporter), declaring a quantity of 52 MT. and FOB value of Rs. 2,40,08,411.76 of export goods
2|Page C/10209/2022 & C/10210/2023-DB declared as 'Copper Strips/Earth Rod (in Coil form) and classified under CTH 85381090. During examination of the cargo by the officers of Docks Examination, the cargo appeared to be 'Copper Bonded Iron Rods' and for further investigation, the matter was referred to SIIB. During investigation, it was observed that the customer broker had filed another shipping bill No. 5609705 dtd. 23.04.2017 on behalf of another exporter M/s. Horizon Enterprises for the goods declared as 'Copper Alloys Electricals and Wire Accessories Copper Earth Rod', classifying the same under CTH 85381090. The qty. of goods covered under SB No. 5609705 dtd. 23.04.2017 was also 52 MT. with an FOB of Rs. 2,38,92,286.90. The consignments covered under both the shipping bills were detained by the SIIB and examination was conducted under panchanama on 05.05.2017 and 08.05.2017. Representative samples were also taken and sent to CRCL, Kandla for testing. Statements of various persons were recorded during the investigation. The investigation revealed that M/s. Horizon Enterprises had misdeclared the description of goods and M/s Basant Global Trade Pvt. Ltd. (Appellant No. 1) had misclassified the goods to avail higher rate of drawback. The investigation also revealed that M/s. Horizon Enterprises was non-existing and fake and Shri Bhavesh Mehta and Shri BhavinKapuria had connived in attempting to export the copper coated iron rods by misdeclaring the same as copper earth rods to avail of higher duty drawback; the actual value of export goods was found to be much lower. After completion of investigation, a show cause notice dtd. 03.11.2017 was issued to both the appellants and also other persons for confiscation of goods and imposition of penalties. In adjudication, the adjudicating authority vide order-in-original dated 25- 11-2020 rejected the classification of the goods and the declared value. He ordered for confiscation of the goods under Sec. 113(h) of the Customs Act, 1962 with option to redeem the same on payment of redemption fine of Rs. 25,00,000/-. A penalty of Rs. 12,50,000/- was imposed each under Sec. 114(ii) and 114AA of the Customs Act, 1962 against the appellant company and ordered to appropriate the Bank Guarantee of Rs. 19,11,000/- against the duty liability, fine and penalty . The Adjudicating authority also imposed a penalty of Rs. 5,50,000/- each under Section 114(ii) and 114AA of the Customs Act, 1962 on Appellant No. 2. The appeal preferred by the appellants against the said order before the Commissioner (Appeals) was dismissed. Hence the appellants are before this Tribunal.
3|Page C/10209/2022 & C/10210/2023-DB
3. Shri Uday M Joshi, Ld. Advocate appeared on behalf of Appellant No.1 and submits that one Shri Bhavin Patel had approached the appellant for finance who thereafter, arranged transaction of export of copper strips in coil form. The entire activity pertaining to this was handled/managed by Shri Bhavin Patel who had also arranged a Customs broker being M/s Praveen Bhatt & Sons. The Appellant was not aware of and did not deal with the export of goods in any manner. Requisite documents including the shipping bill etc. were filed by M/s. Pravin Bhatt & Sons appointed by Shri Bhavin Patel. Since the Appellant did not receive relevant documents regarding exports including the bill of lading the appellant constantly contacted the aforesaid Shri Bhavin Patel as it found something abnormal/fishy regarding the transaction. The Appellant, therefore, also took advice in this regard from the Customs department in such a situation and following advice also changed the Customs Broker. Regarding difficulty the appellant addressed a letter dtd. 03.05.2017 to the Customs department giving various details as well as conveying that on 01.05.2017appellant got suspicious that the CHA was misleading and manipulating facts and that its materials had been interchanged with goods of some other exporter. It appeared that investigation was undertaken when statements were recorded from 05.05.2017 as is apparent from show cause notice which was after 01.05.2017 when the appellant got suspicious and addressed a letter dtd. 03.05.2017 to the Customs department, as aforesaid.
4. He also submits that there was mix up of cargo with which the appellant was being associated and the cargo one of M/s Horizon Enterprises which is apparent from statement of Shri Vipul Thakker, executive of CHA, dtd. 05.05.217 as well as a statement of Shri Bhavin Kapuria, Proprietor of M/s Marc Industries. Thus, the objectionable cargo in question was not relatable to the appellant. On appointment of new Customs Broker, under guidance of new customs broker, appellant filed amended shipping bill no. 5573040 dtd. 21.07.2017. The Appellant also approached Dy. Commissioner of Customs and as guided furnished provisional bond and bank guarantee and on release of goods, the same were exported under the cover of amended shipping bill. However, due to delay and export price fluctuation as well as Ramzan time in U.A.E., Dubai based buyer did not take delivery of goods which were reimported by the appellant.
4|Page C/10209/2022 & C/10210/2023-DB 5. He further submits that on issuance of show cause notice dtd.
03.11.2017, the appellant filed its reply dtd. 25.11.2017 and 29.11.2018 explaning in details about everything as well as giving the chronology of various dates which the appellant reiterates. In the said reply dtd. 25.11.2017, the appellant categorically refered to its letter dtd. 15.06.2017 wherein it was categorically mentioned that it would not claim any drawback or MEIS benefits.
6. He also submits that appellant having amended the shipping bill declaring correct information, goods could not have been confiscated under Section 113(h)(i) of the Customs Act, 1962 or otherwise nor could any penalties be imposed in as much as penalties under Section 114(iii) and Section 114AA of the Customs Act, 1962 have been imposed in the present case. This is in view of the fact, none of the criteria mentioned in the said provision are applicable considering the facts of the present case.
7. He also argued that the impugned order-in-appeal as well as Order-In-Original are non-speaking orders and violative of Principles of Natural Justice in as much as detailed submission made by the appellant have not been considered by the said authorities.
8. He placed reliance on the following judgments in support of arguments.
(i) Diamond Creations Vs. CC Mundra (2022)1 Centax 184.
(ii) JG Impex Pvt. Ltd. Vs. CC NhavaSheva -III (2023)2 Centax 6
(iii) Gayson & Company (P) Ltd. Vs. CC (Port), Kolkata 2019(370)ELT 1026.
9. The Learned Consultant Shri Vikas Mehta appeared and argued for the appellant No.2. He submits that the appellant is not liable to penalty under Section 114(ii) of Customs Act, 1962 inasmuch as there is no allegation that goods were rendered liable to confiscation owing to omission or commission on the part of appellant. Further, they had prepared and filed the shipping bills strictly on the basis of documents received from exporters and there is no iota of evidence to show that appellant had prior knowledge about wrong description that was found by department only after subjecting the goods to various tests. Further, the entire proposal to impose penalty on appellant under Section 114 is based on allegation involving breach of Regulation 11(d),(e) and (m) CBLR, 2013, which have never been enquired into in accordance with
5|Page C/10209/2022 & C/10210/2023-DB procedure prescribed in CBLR,2013. As a matter of fact, the appellant was issued a warning letter and the matter has been treated as closed.
10. He placed reliance on the following judgments.
(i) Morika Shipping and Trading Pvt. Ltd. 2008(227)ELT 575 (T)
(ii) Brijesh International, 2017(352)ELT 229(T)
(iii) P.P. Dutta, 2014(313)ELT 351 (T)
(iv) World Cargo Movers, 2002 (139)ELT 408(T)
(v) DipanakrSen, 2003(159)ELT 260 (T)
(vi) D.K. Shipping Agency, 2016(242)ELT 280 (T)
(vii) Advance Shipping Agency (2023) 2 Centax 157(Tri.Cal)
11. Shri Himanshu P Shrimali, Learned Superintendent (AR) supported the findings in the impugned order.
12. We have carefully considered the arguments of both sides and perused the records. We find that in respect of Appellant No. 1, the case of revenue is that goods were misclassified and mis-declared under Ch. 85 with a view to avail of export incentives. However, we noticed that Shri Vipul Thakkar in his statement dtd. 05.05.2018 stated that he was confronted to the check list for Shipping Bill No. 5573040 dtd. 21.04.2017, filed by his company, to which he confirmed the facts declared thereon and he stated that this check list was a converted one, wherein the name of exporter was converted from M/s Horizon Enterprises to M/s Basant Global Trade Pvt. Ltd. which was done on receipt of communication from Shri Rajvardhan Jha alias Dhiraj (transporter) of M/s. Shivarpan Enterprises. We also find that Shri Bhavin Nileshbhai Kapuria in his statement dtd. 04.05.2017 also stated that there was two cargos to be exported. One by M/s Basnat Global Trade Pvt. Ltd. and another by M/s. Horizon Enterprises, Mumbai. The cargo declared for exports by M/s. Horizon Enterprises was of copper rods and the cargo being exported by M/s Basant Global Trade Pvt. Ltd. is copper strips. The clearances of both the cargo was given to the forwarder Mr. Rajvardhan Jha of M/s Shivarpan Enterprises. The truck carrying the cargo of M/s. Horizon enterprises, Mumbai arrived the CFS gate first, but the checklist for shipping bill in respect of the cargo of M/s. Basant Global Trade Pvt. Ltd. was produced in its place by mistake. Incidentally, both the cargo were 52MT. In such circumstances, it is clear that the disputed cargo was not relating to the bill of entry No. 5573040 filed by the Appellant No.1.
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13. We also find there is no doubt that the disputed consignment was first time exported by the Appellant No.1 and when the suspicious and misleading and manipulation of facts came in knowledge of the Appellant No.1, they approached the Chief Commissioner of Customs, The Principal Commissioner of Customs, Kandla & Mundra Port and later the Deputy Commissioner of Customs, Customs House, Mundra on 04.05.2017. Thereafter Appellant appointed new CHA M/s Eiffel Logistics Pvt. Ltd. and after the guidance of new CHA and department they amended the shipping bill No. 5573040 dtd. 21.04.2017 and goods were then exported vide amended shipping bill No. 5573040 dtd. 21.04.2017. As per the appellant No.1 due to extreme delay in exports, price fluctuations and Ramzan time in UAE, the buyer refused to take the delivery and ultimately the goods had to be re-imported by the Appellant No. 1 vide Bill of Entry No. 2364586 dtd. 07.07.2017.
14. We find that in the present matter as soon as the Appellant No.1 observed the discrepancies and found that its material was interchanged with the goods of some other party, the appellant approached the department. The bonafide act of the appellant No.1 in this matter therefore cannot be doubted. Further, in the present matter department also allowed the amendment in shipping bill and export of the goods to UAE buyer.
15. We find that in the entire disputed matter the Appellant No.1 himself is victim of disputed transaction. We also take note of the Tribunal's decision in the case of Guru Ispat Ltd. v. CCE reported in 2003 (151) E.L.T. 384 (Tri.-Cal.) wherein the re-export of the wrongly shipped goods by the foreign supplier was allowed, by taking into account the bonafide of the appellants, by taking immediate steps, on detection of wrong shipment and by holding that there cannot be any mala fide on the part of the assessee. The said order of the Tribunal stand upheld by the Hon'ble Supreme Court when the appeal filed by the Revenue was rejected as reported in 2003 (157) E.L.T. A87. To the similar effect is another decision of the Tribunal in the case of Aniketa Krishna International v. Commissioner of Central Excise, Jaipur [2012 (280) E.L.T. 131 (Tri.)].
16. In such a scenario, the imposition of any redemption fine and penalties on the allegations and findings of misdeclaration of goods cannot be held to be justified. Accordingly, we set aside the same.
7|Page C/10209/2022 & C/10210/2023-DB
17. As regard the imposition of penalties on Appellant No.2, we find that no case of aiding and abetting is made out against this appellant. There is no case made out of any abnormal gain by the appellant to indicate any collusion or abetment on his part with the exporter of the consignment under dispute. We also find that the Appellant filed the Shipping Bill based upon the information given to him by the exporter and is not expected to investigate and find out the correct declaration of the value and of the goods.In any case, Appellant who apparently acted in a bona fide manner in terms of the instructions of the exporter cannot be penalized on the ground of abetment of any offence of the disputed export goods.
18. In the orders of the lower authorities, the action against the appellant was taken alleging the contravention of regulations of CBLR, 2009, however no action under CBLR, 2009 such as suspension of CB licence, revocation of licence etc. was taken. This itself shows that there is no malafide on the part of the appellant No.2.
19. In view of our above observations, impugned order relates to the present appellants is set aside. Both the appeals are allowed with consequential reliefs, in accordance with law.
(Pronounced in the open court on 13.06.2024) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Neha