Madras High Court
Commissioner Of Customs (Exports) vs I.Sahaya Edin Prabhu on 8 January, 2015
Bench: R.Sudhakar, R.Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 8.1.2015
CORAM
THE HON'BLE MR.JUSTICE R.SUDHAKAR
AND
THE HON'BLE MR.JUSTICE R.KARUPPIAH
C.M.A.No.3174 of 2008
Commissioner of Customs (Exports)
No.60, Rajaji Salai
Custom House
Chennai 600 001. .. Appellant
Vs.
1. I.Sahaya Edin Prabhu
Patriot Freight Logistics Systems
No.15, Meer Bakshi Ali Street
Royapettah, Chennai 600 014.
2. The Customs, Excise & Service Tax
Appellate Tribunal, South Zonal Bench
Shasthri Bhavan Annexe
1st Floor, 26, Haddows Road
Chennai 600 006. .. Respondents
Prayer: Appeal against the Final Order No.1325 of 2007, dated 2.11.2007 passed by the Central Excise and Service Tax Appellate Tribunal, Chennai.
For Appellant : Ms.R.K.Sekina Reshma
Standing Counsel
For Respondents : No appearance
for 1st respondent
J U D G M E N T
(Delivered by R.SUDHAKAR,J.) This appeal is filed by the department assailing the Final Order No.1325 of 2007, dated 2.11.2007 passed by the Central Excise and Service Tax Appellate Tribunal, Chennai.
2.1. The facts in a nutshell are as under: Acting on specific information, on 3.7.2005, a team of officers of Docks Intelligence Unit intercepted the container bearing No.CRXU 197361-3. The said container covered under Shipping Bill No.2098170, dated 30.6.2005 was consigned to Hongkong from M/s.Maheswari Exports, Salem. The goods sought to be exported were declared as Potassium Feldspar Lamps. The consignment was kept ready for loading on the vessel M.V.CONTI JORK. The Customs House Agent was M/s.Patriot Freight Logistic Systems, Chennai.
2.2. During the search, it was found that instead of the declared cargo of Potassium Feldspar Lamps, wooden logs were found stacked inside the container. Statements were recorded from various persons. Later on, the Forest Officer certified the wooden logs as Red Sanders. The total weight of 403 pieces of Red Sander Wooden logs was found to be 11820 Kgs. The total value of the seized goods was arrived at Rs.47,28,000/- (International Market Value) and Rs.20,68,500/- (Local Market Value).
2.3. A show cause notices were issued to the first respondent and many other persons alleged to be involved. The first respondent submitted his explanation and an opportunity of personal hearing was also afforded. Thereafter, the matter was taken up for adjudication. The Original Authority held that two persons, namely J.Thomas and S.Sivakumar, are directly involved in the smuggling and they masterminded and devised ways and means for the attempted illegal export, which was thwarted by the Docks Intelligence Unit. The Original Authority directed confiscation of the Red Sander Wooden Logs and imposed a penalty of Rs.50,000/- on the first respondent under Section 114(i) of the Customs Act.
2.4. Challenging the said order, the first respondent appealed to the Tribunal on the ground that the Original Authority had found no credible evidence of his involvement in the attempted smuggling and, therefore, the penalty imposed should be set aside.
2.5. The Tribunal, taking note of the fact that there is no finding of a positive role of the first respondent in the attempt to smuggle out red sander wooden logs, held that imposition of penalty under Section 114(i) of the Customs Act is not sustainable. The Tribunal allowed the appeal filed by the first respondent and set aside the penalty imposed, by observing that for failure to discharge functions as a Customs House Agent, penalties are provided in the Customs House Agents' Licensing Regulations.
2.6. Calling into question the order passed by the Tribunal, the department has filed this appeal.
3. We have heard the learned Standing Counsel appearing for the appellant and perused the order passed by the Tribunal and the Original Authority.
4. The main plea of the learned Standing Counsel appearing for the department is that the first respondent, while acting as Customs House Agent, has not verified the authenticity of the documents and by such act of negligence, has abetted and aided in the smuggling of the red sander wooden logs, which are prohibited for export, and, therefore, the penalty imposed under Section 114(i) of the Customs Act is justified.
5. The role played by the first respondent, even as per the finding of the Original Authority, is as under:
51. I find that the custom house agent has not discharged his duty in the normal course of his service. He signed the customs document given by some Shri S.S.Sivakumar for monetary considerations, which paved the way for unauthorized persons access to the customs clearing formalities and enabled unscrupulous persons in facilitating the smuggling of prohibited goods.
6. With regard to the above said finding of the Original Authority, the Tribunal, in the order under challenge, held as under:
4. I find that apart from a vague allegation in para 51 of the impugned order (supra) that the appellant had failed to discharge his functions as a CHA, in the entire order, there is no finding of a positive role of the appellant in the attempt to smuggle out red sanderwood logs or the manner in which he abetted the attempt. For failure to discharge functions as a CHA, penalties are provided in the Custom House Agents' Licensing Regulations. In the absence of any finding showing that the appellant had abetted the failed effort to smuggle out prohibited red sanderwood logs, I find that penalty imposed on the appellant under Section 114(i) is not sustainable. Accordingly, the appeal filed by Shri I.Sahaya Edin Prabhu is allowed.
7. The Tribunal has rendered a categoric finding that there is no finding of a positive role of the first respondent in the attempt to smuggle out red sander wooden logs. Even in the order of the Original Authority, it is held that the custom house agent has not discharged his duty in the normal course of his service. As rightly observed by the Tribunal, for failure to discharge functions as a Custom House Agent, penalties are provided in the Customs House Agents Licensing Regulations. Therefore, imposition of penalty under Section 114(i) of the Customs Act is unwarranted. We, therefore, find no reason to differ with the finding of the Tribunal.
In such view of the matter, this appeal is dismissed finding no question of law arising for consideration. No costs.
(R.S.J.) (R.K.J.)
8.1.2015
Index : No
Internet : Yes
sasi
To:
1. The Registrar,
Customs, Excise & Service Tax Appellate Tribunal
No.26, Shasthri Bhavan Annexe Building
Haddows Road, Chennai 600 006.
R.SUDHAKAR,J.
and
R.KARUPPIAH,J.
(sasi)
C.M.A.No.3174 of 2008
8.1.2015