Custom, Excise & Service Tax Tribunal
Mahesh Shipping Agency vs Commissioner Of Customs-Nhava Sheva - ... on 3 October, 2022
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH
CUSTOMS APPEAL NO: 87101 OF 2019
[Arising out of Order-in-Appeal No: 69 & 70 (CAC)/2019(JNCH)/Appeal-I dated
29th March 2019 passed by the Commissioner of Customs (Appeals), Mumbai -
II.]
Mahesh Shipping Agency
Vandana Smruti, B/5 Sector -4, Airoli
Navi Mumbai - 400708 ... Appellant
versus
Commissioner of Customs (NS-II)
Jawaharlal Nehru Custom House, Nhava Sheva
Tal: Uran, Dist: Raigad - 400707 ...Respondent
APPEARANCE:
Shri Prashant Patankar, Consultant for the appellant Shri S B Hatangadi, Assistant Commissioner (AR) for the respondent CORAM:
HON'BLE MR C J MATHEW, MEMBER (TECHNICAL) FINAL ORDER NO: A / 86193 /2022 DATE OF HEARING: 03/10/2022 DATE OF DECISION: 03/10/2022 This appeal of M/s Mahesh Shipping Agency lies against imposition of penalty of ₹ 50,000/- on them under section 114(i) of Customs Act, 1962. According to Learned Consultant for appellant, C/87101/2019 2 who is a custom broker concerned with filing of shipping bill no.
5960984/15.06.2013, 6249633/02.07.2013, 5928290/13.06.2013 and 6248574/02.07.2013 on behalf of M/s N S Overseas and M/s Sagved Exim India, the finding of '10.10 I find that Shri Satish Vithal Gadge, S/o Shri Vithal Rambhau Gadge, CHAs M/s R M Purshotam (11/1629), M/s M/s Express Clearing and Shipping Agency Pvt Ltd (11/766) and M/s Mahesh Shipping Agency (11/1701), Shri R. V. Raut, Kardex No 466, Ph no 9223199170 of CHA M/s Calnix Logistics (11/462) and proprietor of M/s Adity Logistics, cargo forwarder M/s S S Transland Shipping, the container providing agents M/s M/s Intercont Freight Liners Pvt Ltd and M/s Transpole Logistics Pvt Ltd, CFS M/s DBC Port Logistics (earlier M/s Speedy Multimodes Pvt Limited or known as Speedy CFS), Multimodal Clearing Services Pvt Ltd and M/s Top Winner Logistics and/or any other person/persons, connected with the attempt to export red sanders and illegal export of the aforesaid red sanders and other prohibited goods, appear to have, in relation to the said goods, done acts or omitted to do acts or have abetted the doing or mission of such acts, which have rendered themselves liable to penalty under Section 114(i) of the Customs Act, 1962 and penalty under Section 114 (i) and/or 114 AA of the Customs Act, 1962 should be imposed on them.' does not suffice for invoking the penal provision against them.
2. According to Learned Consultant, the said consignment declared to be 'nut and bolt' has since been exported, and presumably, C/87101/2019 3 cleared at destination in the absence of any finding to the contrary. He further submits that the investigation, which led to the impugned order, commenced with seizure of consignment of M/s N S Overseas on 14th November 2013 with identical declaration and found to contain 'red sanders' upon examination for clearance of shipping bill filed by another broker, M/s R M Purshotam, and contends that there is no specific finding on the contents of the containers cleared against bill filed by the appellant in June 2013. Accordingly, he contends that order imposing penalty did not examine the role played by them in the presumed substitution of contents. He argued that the 'let export order (LEO)' had been granted after stuffing at the 'container freight station (CFS)' and that any substitution could have occurred only thereafter when the containers were no longer are under control of the appellant. Reliance was placed upon the decision of the Hon'ble High Court of Bombay in Amritlakshmi Machine Works v. Commissioner of Customs (Import), Mumbai [2016 (335) ELT 225 (Bom.)] holding that '25. We note that Section 135 of the Act begins with the words 'without prejudice to any action that may be taken under the Act' while listing out the offence of evasion of duty or prohibition under Chapter XVI of the Act. The offences listed out in Section 135(1)(a) of the Act would include within it all acts and/or omission to act on the part of any person in relation to any goods, in any way, knowingly, concerned with misdeclaration of value, fraudulent evasion of duty or evasion of any prohibition either under the Act or any other Act. The list is exhaustive to include all acts/omissions which would C/87101/2019 4 render the goods liable for confiscation under Section 111 of the Act for which penalty is provided under Section 112(a) of the Act if they are accompanied with knowledge/mens rea. Thus, the acting or omitting to act leading the goods becoming liable to confiscation would be an offence under Chapter XVI of the Act as it is specified in Section 135(1)(a) of the Act, provided it is done knowingly. Thus the provisions of Section 140 would apply to such offences. It is pertinent to note that Section 140 of the Act while restricting its application to an offence under Chapter XVI of the Act, does not restrict its application only to prosecutions in Criminal Court. Thus Section 140 of the Act could be read into adjudication proceedings resulting in penalty under Section 112(a) of the Act provided the act or omission on the part of any person in making the goods liable to confiscation is also an offence under Section 135(1)(a) of the Act. Section 112(a) of the Act to the extent it covers a person who abets the doing or omitting the doing of any act as plainly read would also be an offence under Section 135(1)(a) of the Act also. This is so as the requirement of knowledge is found only in case of abetment and not in other cases listed in Section 112(a) of the Act. The word abetment is not defined in the Act, therefore, the meaning assigned to it in Section 3(1) of the General Clauses Act, 1897 which is as given under Section 107 of the Indian Penal Code. An abetment would include by definition intentional aiding when covered by Explanation 2 read with third category listed in Section 107 of the Indian Penal Code. (See Supreme Court decision in Shree Ram v. State of U.P. - AIR 1975 SC 175). Mere facilitation without knowledge would not amount to abetting an offence. Parliament has specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person - (a) who in relation to any goods does or omits to do any act ...." would cover acts done or omitted C/87101/2019 5 to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a halt as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty. To illustrate innocent transferee of a license which enabled the purchaser of the license to misuse the license could be imposed with penalty. This could never be the intent or objective of Section 112(a) of the Act.' and of the Tribunal in Commissioner of Customs, Mumbai v. M Vasi [2003 (151) ELT 312 (Tri.-Mumbai)].
'20. S/Shri Lambat, Mutta and Pandey were alleged to have aided and abetted the acting of the two partners. Abetment presupposes knowledge of the proposed offence and also presupposes benefit to be derived by the abetters therefrom. Even if the action of backdating of the agreement is improper (and perhaps illegal), there is nothing in the evidence to indicate that these three persons were aware that the backdated document was a cover up for an offence under the Customs Act, 1962. In the absence of conscious knowledge, penalty on charge of aiding and abetting would not sustain.' C/87101/2019 6
3. Learned Authorised Representative submits that every 'customs broker' is obliged to ascertain whereabouts of customers/shipper before handling the consignment. He submits that the interdicted attempt to export 'red sanders' in the guise of 'nut and bolt' was identical to the one in which the appellant was involved. He relied upon the decision of the Tribunal in LCL Logistics (India) Pvt Ltd v.
Commissioner of Customs (Export), Nhava Sheva [2011 (273) ELT 571 (Tri.-Mumbai)], in Inox India Ltd v. Commissioner of Customs (Export), Nhava Sheva [2013 (294) ELT 630 (Tri.-Mumbai)], in Sylvester & Co v. Commissioner of Customs (Export), Mumbai [2015 (328) ELT 478 (Tri.-Mumbai)] and in Nandu Raghunath Shinde v.
Commissioner of Customs (Export), Nhava Sheva [2015 (317) ELT 525 (Tri.-Mumbai)], dealing with presumption of mens rea upon a finding that the process envisaged in Customs Act, 1962 for declaration as well as clearance had not been complied with. He also placed reliance on the decision in Naveen Mehta v. Commissioner of Customs (Port), Kolkata [2017 (358) ELT 857 (Tri.-Kolkata)].
4. Having heard both sides and having perused the impugned order, it is interesting to note that the penalty imposed on the appellant has been upheld on the finding that '14. It is not disputed that M/s. Mahesh Shipping Agency booked six containers where the exporters were K. Impex India, N.S. Overseas, Sagved Exim. It has come out that the C/87101/2019 7 exporters were not genuine and were either dormant or shifted to some other address. Thus, it is evident that the credentials of the exporters were not verified. Though the role of M/s. Mahesh Shipping Agency is not linked to the live consignment, it has come out that the IECs of the exporters in the earlier 6 consignments were mis-used by the perpetrators. Thus, it is proved beyond doubt that the appellant acted in violation of Public Notice 17/2012.' This is particularly so, as the order impugned before the first appellate authority does not conform factually as far as the appellant is concerned. The original authority imposed penalty against the appellant solely on '10.9 I find that the goods exported vide another 6 shipping bills as prohibited goods as export was not in accordance with the provisions of Act, the rules and orders made there under and the export and import policy for the time being in force. These prohibited goods S/Bill No and Date Container No Exporter FOB (Rs) 1 8036689 dated FKTU 2348164 M/s K Impex 979200 19.10.2013 India 2 7949576 dated BLJU 2124734 M/s K Impex 738600 14.10.2013 India 3 5960984 dated CLSU 2117769 M/s N.S. 562968 15.06.2013 Overseas 4 6249633 dated MAXU2439439 M/s. N.S. 803160 02.07.2013 Overseas 5 5928290 dated CLSU2115935 M/s Sagved 482544 13,06.2013 Exim India 6 6248574 dated GATU1084962 M/s Sagved 1344420 02.07.2013 Exim India These goods have been rendered liable for confiscation under Section 113(d), 113(f), 113(g), 113(h) and 113(i) of the Customs Act, 1962 read with Section 11 of the Foreign Trade (Development &.Regulation) Act, 1992 and Rule 14(2) of the Foreign Trade (Regulation) Rules, 1993 and the rules framed by the State under the Indian Forest Act, 1927.
C/87101/2019 8 10.9 As per letter of M/s. N. S. Overseas dated 11.11.2013, received at the office of investigating agency on 21.11.2013, they informed that they had no export order since last two years and their original IEC / PAN card, signed letter head, AD code letter with Mr. Syed Junaid All for Port Registration, were not given back for which it (M/s. N. S. Overseas) had made Police complaint at its police station Kotwali Mughappura, Moradabad which had been received in police station on 10.11.2013. In the complaint letter the informed that on being asked about the registration of firm and demand of originals, Shri Junaid Ali continuously avoided. The complainant letter maintained that no export has been made by the complainant and requested for strong legal action against Shri Sayed Junaid Ali. I find that this was an afterthought of M/s. N. S, Overseas to divert the attention of the investigating agency and to prove themselves innocent only. They made a complaint in the police station only after detection of the case by the investigation agency. In view of above a penalty should be imposed on M/s. N. S. Oversea under Section 114(i) of the Customs Act, 1962.
10.10 I find that Shri Satish Vithal Gadge, S/o Shri Vithal Rambhau Gadge, CHAs M/s R M Purshotam (11/1629), M/s M/s Express Clearing and Shipping Agency Pvt Ltd (11/766) and M/s Mahesh Shipping Agency (11/1701), Shri R. V. Raut, Kardex No 466, Ph no 9223199170 of CHA M/s Calnix Logistics (11/462) and proprietor of M/s Adity Logistics, cargo forwarder M/s S S Transland Shipping, the container providing agents M/s M/s Intercont Freight Liners Pvt Ltd and M/s Transpole Logistics Pvt Ltd, CFS M/s DBC Port Logistics (earlier M/s Speedy Multimodes Pvt Limited or known as Speedy CFS), Multimodal Clearing Services Pvt Ltd and M/s Top Winner Logistics and/or any other person/persons, connected with the attempt to export red C/87101/2019 9 sanders and illegal export of the aforesaid red sanders and other prohibited goods, appear to have, in relation to the said goods, done acts or omitted to do acts or have abetted the doing or mission of such acts, which have rendered themselves liable to penalty under Section 114(i) of the Customs Act, 1962 and penalty under Section 114 (i) and/or 114 AA of the Customs Act, 1962 should be imposed on them.'
5. It is also seen that the original authority refrained from confiscating the goods under section 113 but at the same time imposed penalty under section 114 of Customs Act, 1962; he has not held the goods even liable for confiscation. This is in clear breach of condition preliminary for imposition of penalty. Consequently, it is apparent that the penalty on the appellant should not have been imposed at all. Accordingly, the impugned order is set aside and appeal allowed.
(Dictated and Pronounced in Open Court) (C J MATHEW) Member (Technical) */as