Custom, Excise & Service Tax Tribunal
M/S. Mohini Organics Pvt. Ltd vs Commissioner Of Customs (Export), ... on 20 January, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. C/132,166/08 (Arising out of Order-in-Original No. 61/2007 dated 28.12.2007 passed by the Commissioner of Customs (Export) JNCH, NHAVA SHEVA For approval and signature: Honble Shri A.K. Srivastava, Member (Technical) ============================================================
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M/s. Mohini Organics Pvt. Ltd.
:
Appellants
M/s. B.N. Thakkar & Co.
VS
Commissioner of Customs (Export), Jnch, Nhava Sheva
Respondents
Appearance
Shri V.M. Doiphode, Advocate, for
Mohini Organics Pvt. Ltd.
Shri N.D. George, Advocate for
B.N. Thakkar & Co. For appellants
Shri Kishorilal, Authorized Representative (SDR)
CORAM:
Shri A.K. Srivastava, Member (Technical)
Date of hearing : 20/01/2009
Date of decision: /02/2009
ORDER NO.
Per : Shri A.K. Srivastava, Member (Technical)
These appeals have been filed by M/s. Mohini Organics Pvt. Ltd., Mumbai (hereinafter referred to as exporter) and M/s. B.N. Thakkar and Co. Mumbai (hereinafter referred to as CHA) against the Order-in-Original No. 61/2007 dated 28.12.2007 passed by the Commissioner of Customs (Exports), JNCH, Nhava Sheva. The Commissioner, vide the impugned order, held that the impugned goods exported under the Shipping Bill No. 4911439 dated 12.01.2007 valued at Rs. 39,69,280/- are liable to confiscation under Section 113(f) and (g) of the Customs Act, 1962. Accordingly, he ordered for confiscation of the goods, though the goods were not available for confiscation. He gave an option to the exporter to redeem the goods on payment of fine of Rs.6,00,000/-. He also imposed penalty of Rs.4,00,000/- each on the exporter and the CHA under Section 114(iii) of the Customs Act, 1962.
2. Heard both the sides and perused the records.
3. The brief facts of the case are that the exporter had dispatched 4 X 20 containers consisting of 2560 packages of Glycol and Fatty Alcohol from their factory. These were the factory stuffed containers having Central Excise Seal. The shipping bill was filed through the CHA and the containers were taken in the Port Area on 13.01.2007. While permitting the entry of the containers inside the port, the gate Customs Officer checked the shipping bill as well as the original invoice. He also verified the container Nos. as well as the Central Excise Seal on the containers, which were found intact.
4. On the basis of Custom Officers endorsement on the check list, the CHA forwarded a copy of the Shipping bill and Customs Invoice to the Customs for obtaining the let export Order. However, on 13/01/07, being 2nd Saturday & 14/01/07, being Sunday, the Let Export Order was issued only on 15/01/07. When representative of the CHA went to the Shipping line to hand over the out of charge Shipping bill, he came to know that the vessel had already sailed with the four containers on 14.1.2007 without obtaining the out of charge. The CHA immediately notified this fact to the Customs and thereafter the exporter on 22/05//2007 informed the Commissioner of Customs and the CHA sent another letter dated 08/06/07 informing the factual position.
5. The Commissioner has held that the exporter/CHA have failed to perform their duties properly as they did not inform the Shipping Agent to stop the containers from being loaded without the supervision and approval of the officer of Customs; and that they did not make any genuine attempt to stop the container from being loaded before sailing of the vessel. I find that the Commissioner has presumed that the exporter/CHA had acknowledge that the Shipping line was loading the container without the supervision of Customs and without taking the let export order. In fact, it is the CHA who informed the Customs vide letter dated 08/06/07 about the incident and the exporter themselves had written a letter on 22/05/07 informing the factual position. Further, it is not the case of the Department that the exporters or CHAs representative was present at the time of loading of the containers or the exporter and/or CHA had instructed the Shipping line to load the containers without taking permission of the Customs authorities.
6. The Public Notice No. 42 dated 22/03/99 issued by the Commissioner of Customs (Export Promotion), Mumbai in para 9 says that in case of container cargo, the stuffing of container will be done under the preventive supervision and as per para 9.2, the Customs Preventive Officer supervising the loading of container into the vessel will give Shipped on Board endorsement on the exporters copy of the shipping bill. Thus there is failure of Customs at the time of loading. At the time of loading of the containers, the Customs should have told the shipping line Officers that the containers cannot be loaded without the let export order.
7. I find that the exporter/CHA had complied with the provisions of section 50(1) of the Customs Act, 1962 by presenting the Shipping Bill to the proper officer in respect of the said goods. Section 35 of the Customs Act does not cast any liability on the exporter/CHA. Section 34 of Customs Act, 1962 lays down that export goods shall not be loaded on any conveyance except under the supervision of the proper officer of Customs. Thus it is for the Customs to ensure at the time of supervision of loading of the containers on board a vessel that the exported goods are accompanied by a shipping bill. Section 36 provides that no export goods shall be loaded on any conveyance on any Sunday or any holiday observed by this Customs Department except after giving the prescribed notice and on payment of the prescribed fees, if any. It is not the case of the Department that the exporter/CHA knew that the Shipping line is loading the containers on board the vessel and they did not inform the shipping line. Section 40 of the Customs Act casts liability on a person in charge of conveyance and not on the exporter/CHA.
8. There is nothing on record to hold that the exporter/CHA have handed over the containers to the Shipping line for loading after entry into the dock. Being the Customs area, it is under the custody and control of the custodian. In fact, the letter dated 08/06/07 from the CHA states that on 15/01/07, when the CHA went to hand over out of charge Shipping bill to the Shipping Co., at that the time they came to know that the vessel has already sailed.
9. Further, confiscation of the goods already exported, which are not available for confiscation and imposing redemption fine on the exporter is contrary to the ratio of the Order No. M/43-44/09/SMB/LB dated 19.01.2009 passed by Larger Bench of the Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. Vs. Commissioner of Central Excise and Commissioner of Customs Vs. Rishi Ship Breakers. Hence, the imposition of redemption fine is not sustainable.
10. Further, I find that the subject consignment was examined by the Central Excise Officers, and the Custom Cargo was accepted by the foreign buyers and the proceeds have been realized.
11. There was no omission or commission on the part of the exporter/CHA rendering the subject goods liable to confiscation and only observation by Commissioner in para 19 of the impugned order is that they did not inform the Shipping line to stop the containers from being loaded without the supervision and approval of the officer of the Customs, when the fact is that they had no knowledge that the containers were loaded by the Shipping Line, without the supervision or without the let export order from the proper Officer of Customs.
12. There is no evidence of any incriminating conduct against the exporter/CHA. There is no implicatory allegation in the show cause notice and/or evidence against them so as to attract the provision of Section 114 (iii) of the Customs Act, 1962. The Honble Supreme Court in the case of Hindustan Steel Ltd. Vs. State of Orissa reported in 1978(2) ELT 159 (SC) has held that penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. The conduct of the exporter/CHA in the present case does not indicate that they had acted deliberately in defiance of law or were guilty of conduct contumacious or dishonest or acted in conscious disregard of their obligation. Hence, the imposition of penalty on them is not warranted in the facts and circumstances of the case.
13. The learned SDR has cited the Tribunal Judgement in the case of M/s. LMJ International Ltd. and Others Vs. Commissioner of Customs (Export) Nhava Sheva (Order No. A/1626 to 1628/C-IV/SMB/2007 dated 29.11.2007) in which the penalty has been sustained on the exporter/CHA on the ground that the exporter did not make any genuine attempt to stop the containers from loading and the CHA did not inform the Shipping Line not to load the containers on the vessel, when they were aware that the Let Export Order was still pending. I have been informed by the Learned Counsel of the appellants that this Judgement of the Tribunal has not been accepted by the affected parties and the same is under challenge before the Honble Bombay High Court. I find that if the decision is under challenge, its correctness is in jeopardy and it does not have precedent value, as has been held by the Tribunal in the case of Commissioner of Central Excise, Chennai II Vs. BOC India Ltd. reported in 2007 (212) ELT 222 (Tri-Chennai). For holding so, the Tribunal has relied upon the Honble Supreme Court judgement in the case of UOI Vs. West Coast Paper Mills Ltd. reported in 2004 (164) ELT 375 (SC). Therefore, placing reliance on the Tribunals decision dated 29.11.2007 in the case of M/s. LMJ International Ltd. and Others (Supra) will not be in order as it has not yet attained finality.
14. In the light of the above discussions, I hold that the impugned order passed by the Commissioner, so far as it relates to the imposition of the redemption fine and the penalties on the exporter and the CHA, is not sustainable. The same is set aside to this extent. The appeals filed by the exporter and the CHA are allowed.
(Pronounced in court on /02/2009)
A.K. Srivastava
Member (Technical)
Sm
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