Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Export), ... vs Mr. Sohel Firoz Kazani & on 23 January, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. C/89377/14 (Arising out of Order-in-Appeal No. 2641 & 2642(ADJN.-EXP)/ 2014(JNCH)/EXP-132 & 133 dated 26.6.2014 passed by the Commissioner of Customs (Appeals), Mumbai-II). For approval and signature: Honble Shri Anil Choudhary, 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 : Yes 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? ====================================================== Commissioner of Customs (Export), Nhava Sheva Appellant Vs. Mr. Sohel Firoz Kazani & Mr. Ramdas T Gadge Respondents Appearance: Shri M.S. Reddy, Dy. Commissioner (AR) for Appellant Shri S.N. Kantawala, Advocate for Respondents CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 23.01.2015 Date of Decision: .05.2015 ORDER NO. Per: Shri Anil Choudhary
The Revenue is in appeal being aggrieved with the Order-in-Appeal No. 2641 & 2642(ADJN.-EXP)/2014(JNCH)/EXP-132 & 133 dated 26.6.2014 passed by the Commissioner of Customs (Appeals), Mumbai-II, wherein the penalty imposed on the respondent (Director of CHA firm), Shri Sohel Firoz Kazani and the employee Shri Ramdas T Gadge of the CHA firm M/s Interport Impex Pvt. Ltd. imposed under Section 114(i) of the Customs Act, 1962 was set aside.
2. The brief facts of the case are that the officers of SIIB, JNCH along with examination staff of Customs posted at Speedy Multimodes Ltd., Navi Mumbai examined an export consignment in the presence of CHA representative on 31.8.2010 of M/s Crescent Trading and Impex Co., Pune. On detailed examination and due testing of samples, it was found that actual goods under export declared as Dal Husk, were actually non-basmati rice which is prohibited vide Notification No. 38/07 dated 15.10.2007. Detailed investigation revealed that two persons viz. Shri Anand Kursija and Shri Om Prakash Gurbani attempted to export non-basmati rice illegally under VKGUY scheme. For this purposes, they unauthorisedly used the IEC of M/s Crescent Trading and Impex Co., Pune by forging and fabricating the letter heads and stamps of the said firm. Regarding the role of the respondents in this case, it was found that the Respondent No. 1 Director of the CHA firm and Respondent No. 2 (employee of the CHA firm) had aided and abetted the kingpins inthis case by arranging customs clearance of the prohibited goods as CHA. The CHA also attempted to export non-basmati rice in guise of Dal Husk. As the said CHA was knowingly involved in the mis-declaration of prohibited goods which were attempted to be exported and thus was held liable for penal action under Section 114(i) of the Customs Act. The export cargo (non-basmati rice and Dal Husk) were held liable for confiscation under Section 113(d) and 113(i) of the Customs Act. A penalty of Rs.10 lakhs was imposed on respondent No. 1, the Director of the CHA firm, Mr. Sohel Firoz Kazani and a penalty of Rs.5 lakhs under Section 114(i) was imposed on the employee of the CHA firm, Mr. R.T. Gadge.
2.1 Being aggrieved, the respondents herein preferred appeal before the Commissioner (Appeals). The learned Commissioner (Appeals) have observed that in normal course of duty, the Shed Officer had detected on 25.8.2010, the date on which the goods in question were carted in, a consignment which did not have marks and number. The Shed Officer had directed the authorized employee of the CHA (respondent No. 2) to the de-stuff the container for examination. The said employee had complied with the instruction and had de-stuffed the container in the yard on 26.8.2010. It is the matter of record that the respondent No. 1 had himself informed the authorities i.e. the Assistant Commissioner of Customs (Export) in writing with a copy marked to Manager and Apprising Officer at Speedy CFS, the Commissioner of Customs (Export) and the officer of Directorate of Revenue Intelligence on the same date i.e. on 26.8.2010 itself, informing with reference Shipping Bill No. 8781138 dated 23.8.2010 about the mis-declaration of cargo discovered by them in the process of marking the bags containing the cargo. It was specifically informed that the subject load of the goods contained rice and not Dal Husk as declared by the shipper. Further details were provided to the authorities like IEC code of the shipper, contract details, copy of shipping bills, copy of carting report and registration, copy of bond given to the CHA by the shipper authorizing them and undertaking to indemnify against any mis-declaration. Further, in the course of investigation, it was found that the IEC code used for the subject consignment was not that of the actual exporter. The mastermind of the whole operation was the said Anand Kursija, who was in connivance with Shri Gurbani for export of rice, which was prohibited. The allegation on the respondent is that they had knowingly aided and abetted the export of the prohibited goods. The scrutiny of the records proved to contrary of the findings in the Order-in-Original. It was further found by the learned Commissioner (Appeals) that findings in the Order-in-Original for imposing penalty are based on assumption and presumption. The Commissioner (Appeals) has further observed that during investigation of the case a report from the Customs Officer Shri Sonawane was called for. In the said report dated 8.9.2010 it was informed that, on 25.8.2010 at about 7.00 p.m. representative of the CHA came to me with the checklist and invoices for concerned shipping bill requesting for examination of the cargo. He with the CHAs representative examined the cargo and instructed the CHA representative to de-stuff the cargo for examination. It is also mentioned that while de-stuffing of the cargo was done on 26.8.2010, it was noticed that no shipping marks and number, as per the related invoices, were found on the gunny bags. It is further observed that the statement of the CHA representative and respondent No. 2 Mr. R.T. Gadge, in which he had stated that on 25.8.2010 around 17.30 hrs. two containers for export in the name of M/s Crescent Trading and Impex were taken in by him at Speedy CFS. That around 7.00 pm when he asked Customs officer Shri Sonavane to examine the goods, he was told by Shri Sonavane and Supdt. V.K. Menon that the goods could not be examined without de-stuffing. On 26.8.2010, the said employee of the CHA informed his office that the goods needs to be de-stuff for examination and the same was got done by 5.30 pm on 26.8.2010 and when he came to know that container had rice instead of dal husk, he immediately informed Shri Sohel Kazani, the Director of CHA, who immediately reached the CFS and informed the authority in writing as indicated herein above. The Commissioner (Appeals) further found that CHA have followed the rules and procedure for export of goods and have never avoided the de-stuffing of the container for examination. If the CHA would have been in connivance or that the containers were having prohibited goods rice, he would have tried to convince the examining officer of the Customs to examine the cargo without de-stuffing, which is not the fact obtained as per the report of Customs officer Mr. Sonavane. Accordingly, the learned Commissioner (Appeals), in the facts and circumstances found that CHA has no role except to present the document and check-list. Further, the CHA has not done anything to avoid the procedure to be followed at the time of carting in of goods and/or examination of the goods by the Customs officer. It was categorically held that it cannot be said that the respondents were having prior knowledge of the actual goods contained in the container at the time of carting in. Further, on very first opportunity on getting knowledge of prohibited goods, the CHA have informed the Customs authorities in writing. Thus, the action of the CHA cannot be considered to be an after-thought. Further, no other mala fide was found regarding the use of IEC of another by the said Anand Kursija and Shri Gurbani. Accordingly, the Commissioner (Appeals) found that the penalty imposed on the respondent Director and the CHA is bad and set aside the same. The Commissioner (Appeals) also relied on the ruling of this Tribunal in the case of Airtravel Enterprises India Ltd. Vs. Commissioner of Customs (Sea Port), Coimbatore 2009 (239) ELT 275 (Tri-Chennai) and also the ruling in the case of Commissioner of Customs (Prev), West Bengal Vs. Over Land Agency 2006 (204) ELT 554 (Cal). In the case of Airtravel Enterprises (supra), the CHA had taken up export documentation without verifying the bona fide of the parties. Person posing as exporter was not having IEC code assigned and using that of others. Moreover, such exporter was no functioning from address furnished to DGFT pertaining to such IEC assignee. Further, mis-declaration of quantity, value and description of the export goods was found. In such circumstances, there being no finding of positive role of CHA which can be described as attempt to illicit export, no penalty was held imposable on the CHA of the exporter.
3. The learned AR appearing for the Revenue reiterates the grounds of appeal and submits as under: -
3.1 The manner in which the goods were carted also confirms the role of the CHA in the matter. Goods were carted without tallying the marks and nos of the packages. It was seen that the employee of the CHA approached Customs officer for examination on 25.08.2010 and there was an attempt to get the goods cleared without bringing the goods out of the container. If the officer can notice the presence of the prohibited goods inside the container before destufiing in shed at night time, Shri Ramdas Gadage could also notice it before carting of goods and brought it to the notice of the officer before proceeding for examination.
3.2 The appellant involved himself knowingly in abetting the export of the prohibited goods and thus making the goods liable to confiscation under Section 113 of CA and thus has rendered himself liable to penal action under Section 114(i) of CA 62.
3.3 The officer in his report mentioned that while de-stuffing the cargo which was done on 26.08.2010, it was noticed that no shipping marks and numbers, as per the related invoice were found on the gunny bags. It was impossible to read the marks and nos on the gunny bags stuffed in the 40 feet container during the night time on 25.08.2010.
3.4 It was seen that the employee of the CHA approached Customs officer at about 07.00 pm for examination on 25.08.2010 and there was an attempt to get the goods cleared without bringing the goods out of container.
3.5 CHA had not followed the public notice no. 75/2010 dated 20.07.2010.
3.6 It was a responsibility of the CHA to verify the antecedents of the exporter or their customer.
3.7 The act of Shri Sohel Kazani appeared to be a desperate act for covering his role in smuggling of prohibited goods out of India and nexus between exporter and CHA.
3.8 Whether or not the respondents had knowingly attempted to export prohibited goods i.e. rice in the guise of dal Husk are liable for penalty under Section 114(iii) of the Customs Act, 1962.
3.9 The ratio of the judgement in the case of AIRTRAVEL ENTERPRISES INDIA LTD. vs. C.C. (SEA PORT), COIMBATORE [2009 (239) E.L.T. 275 (Tri Chennai)] and also judgement in the case of Commr. Of Cus. (Preventive), West Bengal vs. Over Land Agency [2006 (204) ELT 554 (Cal.)] as relied upon by Commissioner (Appeal) was not applicable in the instant case as the appellant had knowingly indulged in the fraudulent export of the impugned goods.
3.10 It is established principle of law that fraud and justice do not dwell together. An appellant acting in defiance of law has no right to claim innocence when he fails to exercise due care and diligence. Enactments like Customs Act 1962, and Customs Tariff Act 1975, are not merely taxing statues but are also potent instruments in the hands of the Government to safeguard interest of the economy. Exposing entire modus operandi through allegations made in the show cause notice on the basis of evidence gathered by Revenue against the respondents was sufficient opportunity granted for rebuttal. Reliance is placed on the judgment in the case of M/s K. I. International Ltd. [2012 (2) ECS (126) (Tri Chennai)].
4. The learned Advocate appearing for the respondents reiterates the findings of the learned Commissioner (Appeals) and submits that the impugned order is legal and proper and there is no interference required.
5. Having considered the submissions made by both the sides, I find that there is no breach of obligations by the respondents Director and employee of CHA. It is not the case that CHA had got the goods loaded in the container. Further, on noticing the mis-declaration at the time of de-stuffing, the respondents have immediately informed the concerned authority in writing. Further, the respondents have co-operated in investigation against the said kingpins who have attempted export of prohibited goods. Accordingly, I uphold the impugned order passed by the learned Commissioner (Appeals).
6. The appeal of the Revenue is dismissed. The respondents will be entitled to consequential relief, if any.
(Pronounced in Court on ) (Anil Choudhary) Member (Judicial) Sinha 8