Custom, Excise & Service Tax Tribunal
Shailesh S. Shetty vs Commissioner Of Customs & Central ... on 9 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/86304 & 86305/2015 (Arising out of Order-in-Original No.52/Customs/Commr./2014) dated 06.08.2014 passed by the Commissioner of Customs, Central Excise & Service Tax, Aurangabad ) For approval and signature: Honble Shri Ramesh Nair, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Shailesh S. Shetty
:
Appellant
Freight Connection India Pvt. Ltd.
VS
Commissioner of Customs & Central Excise, Aurangabad.
:
Respondent
Appearance
Ms. Subra Karmakar, Advocte for Appellant
Shri Kamal Puggal, Asstt. Commr. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 09/03/2016
Date of decision: 09/03/2016
ORDER NO.
These appeals are directed against Order-in-Original No.52/Customs/Commr./2014 dated 06.08.2014 passed by the Commissioner of Customs, Central Excise & Service Tax, Aurangabad, whereby the adjudicating authority has imposed a penalty of Rs.10 lakhs on the appellant company and penalty of Rs.2 lakhs on Sales Executive name of the said company. The penalty was imposed in a case relating to smuggling of Red Sanders. The container was ordered by the appellant to M/s, Marinetrans (I) Pvt. Ltd. but the appellant have not complied with the requirement of KYC Norms in terms of Public Notice No. 17/2012 issued by Commissioner of Customs (Export) JNCH Nhava Sheva.
2. Ms. Subra Karmakar, Ld. Advocate appearing for the appellants submits that the penalty was imposed only on the ground that the appellants have not complied with the Public Notice No. 17/2012. According to the said Public Notice, the KYC Norms has to be followed in respect of exporter/person seeking container. She submits that in the present case, other freight forwarder sought the container from the appellant and the KYC norms of the said freight forwarder was complied with, therefore there is no non-compliance of KYC Norms on the part of the appellant. She further submits that in the present case, the actual exporter could not be traced out, therefore in case of absconding of the main exporter, the other person should not be penalized. She relied upon the decision of Tribunal in the case of Mithran Vs. Commissioner of Customs, Coimbatore 2009 (234) ELT 465 (Tri.-Chgennai). She also relied upon this Tribunal decision in their own case vide order No. A/3197/15/SMB dt, 9.6. 2015 she prayed for waiver of penalty on the appellant.
3. On the other hand, Shri Kamal Puggal, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned. He submits that against the very same order in respect of other appellants which are on the same footing in the case of Scope Amra Logistics (I) Pvt. Ltd. Vs. C.C.E.C & S.T., Aurangabad 2015 (324) ELT 724 (Tri.-Mumbai) wherein the penalties imposed on the Scope Amra Logistics (I) Pvt. Ltd. (supra) and Mithran this Tribunal reduced the penalties, but in the said case the appellant were held guilty for non-compliance of Public Notice No. 17/2012. Therefore in view of this judgment no different view can be taken in the present case.
4. I have carefully considered the submissions made by both the sides. I find that the penalties on the appellants were imposed for non-compliance of KYC norms as prescribed under Public Notice No. 17/2012. According to which, the appellant is suppose to comply the following norms:
1. To curb the menace of smuggling of prohibited goods like rd sanders it is directed that all the shipping lines agents/sub-agents, container lines, container line agents/sub-agents, freight forwarders etc. should follow Know Your Customer (KYC) norms and must insist on and keep at least three documents out of the documents listed below in their records from exporter/person seeking the container for stuffing of export cargo (document at Sr. No.1 must be one of the three documents):
1. One of the photo IDs of person seeking to book the container/photo ID of authorized of exporter. Viz. PAN Card, Driving licence, Election ID Card, Pass Port.
2. Address proof of the exporter-viz telephone Bill (landline) or electricity bill or passport.
From the Public Notice, it is clear that the shipping lines, shipping lines agents/sub-agents, container lines, container line agents/sub-agents, freight forwarder etc. who give the container on lease/rent for stuffing of export cargo, the KYC norms of exporter/person seeking the container should be followed that means all the persons such as shipping lines, shipping line agents/ sub-agents, container lines, container line agents/sub-agents freight forwarders etc. all have to obtain the photo IDs or other identity proof, address proof of the exporter, photo copy of IEC of exporter. I do not agree with the submission of the Ld. Counsel that the appellant has obtained the KYC norms of the freight forwarder, who order for container. The appellant has not taken the KYC norms of the exporter/person who has placed the order for container for the purpose of stuffing of the goods. I observed from this Tribunals order in the case of Scope Amra Logistics (I) Pvt. Ltd.(supra), which was passed against the same impugned order and found that the persons involved in that case are on identical footing of the present appellant. In case of Scope Amra Logistics (I) Pvt. Ltd.(supra), the following order was passed:
In view of the facts of the present case, it is clear that the appellants, were not involved in the smuggling of Red Sanders for the reason that the containers were stuffed and sealed with Corrugated Boxes at ICD, Waluj under the physical supervision of the Customs officers, thereafter the custodian got the control of the container. The tampering of seal, change of the goods, i.e., loading concealment of prohibited goods, i.e., Red Sanders were taken place in the transit from ICD to the Nhava Sheva Port. This clearly shows that the present appellants whose role was to arrange and provide the empty container for export goods, cannot be implicated in the act of smuggling of Red Sanders. However, the appellants have knowingly about the Public Notice No. 17/2012 not complied with the KYC norms of the person Shri Rohit Mahadik who placed order for container. The said public notice clearly instructs the container lines, shipping line, freight forwarders, agents, sub-agents, etc., to follow the Know Your Customer (KYC) norms of the exporter/person seeking the container for stuffing of export cargo. The sole objective of the circular is to avoid smuggling of prohibited goods, especially Red Sanders. Therefore, by not following the KYC norms by the appellants, they made liable themselves for imposition of penalties. The ld. Commissioner has imposed penalties on both, i.e., on companies as well as on the employees of both the appellant companies, which in my view is not correct. From the records, it is not established that the employees have deliberately for their vested interest committed an act to make the goods liable for confiscation. From the nature of the offence committed in the present case, when the penalty is imposed on the companies, penalties on the employees are not warranted. As regard penalties on the appellant companies, I find that in view of the role of the companies, the lapse is only confined to the non-compliance of KYC and not involvement in the smuggling of Red Sanders. In view of this facts, I am of the view that the quantum of penalty on the appellant companies are very higher side and the appellant companies deserve reduction in the penalty imposed under Section 114(i). As regard the judgments relied upon by the ld. Counsel, I find that both the said judgments have not dealt with the Public Notice No. 17/2012, therefore, the ratio of the same are not applicable, hence distinguished.
5.1?In view of above discussions, the Appeal No. C/89914/14 filed by Shri K. Venugopal and Appeal No. C/89913/14 of Shri Manoj B. Kotiyan are allowed. In appeals of M/s. Marinetrans (I) Pvt. Ltd. and M/s. Scope Amra Logistics (I) Pvt. Ltd., the penalties are reduced from Rs. 15 lacs to Rs. 5 lacs in each appeal.
Since the fact and the status of the appellant in the above case are same as the present appellant, I hold that the appellant is found guilty of non-compliance of Public Notice No. 17/2012 and liable for penalty. However in respect of the appellant company following the ratio of the above judgment, I reduce the penalty from Rs.10 lakhs to Rs. 3 lakhs. Hence the appeal No. C/86305/2015 of company is partly allowed and the appeal No. C/86304/2015-Mum., which is in respect of Shri Shailesh S. Shetty, who is employee of the appellant company is allowed.
(Pronounced & Dictated in court) (Ramesh Nair) Member (Judicial) SM.
6Appeal No. C/86304 & 86305/2015