Custom, Excise & Service Tax Tribunal
Perma Container Line (India) Pvt. Ltd vs Commissioner Of Customs (Export), ... on 27 April, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. C/365/08 & C/412/08 (Arising out of Order-in-Original No. 64/2008 dated 10.01.2008 passed by the Commissioner of Customs (Export), JNCH, SHEVA For approval and signature: Honble Shri A.K. Srivastava, Member (Technical) ============================================================
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Perma Container Line (India) Pvt. Ltd.
:
Appellants
M/s. Nash Robotics & Automation Pvt. Ltd.
VS
Commissioner of Customs (Export), JNCH, Sheva, Raigad
Respondents
Appearance
Shri K.R. Shriram, Advocate and
Shri C.S. Reddy, Advocate for Appellants
Shri N.A. Sayad, Authorized Representative (SDR)
CORAM:
Shri A.K. Srivastava, Member (Technical)
Date of hearing : 27.04.2009
Date of Pronouncement : .04.2009
ORDER NO.
Per : Shri A.K. Srivastava, Member (Technical)
These appeals have been filed by M/s. Nash Robotics and Automation Pvt. Ltd., Nashik (hereinafter referred to as exporter) and M/s. Perma Container Line India Pvt. Ltd., Mumbai (hereinafter referred to as Shipping Line) against the Order-in-Original dated 10.1.2008 passed by the Commissioner of Customs (Export), JNCH, Nhava sheva. The Commissioner, vide the impugned order, held that the impugned goods exported under Shipping Bill No. 4527414 dated 19.08.2006 valued at Rs.63,28,280/- are liable to confiscation under Section 113(g) of the Customs Act, 1962. Accordingly, he ordered for confiscation of the goods, though the goods were not physically available. However, he gave an option to the exporter to redeem the goods on payment of fine of Rs.5,00,000/- under Section 125 of the Customs Act, 1962. He also imposed penalty of Rs.5,00,000/- on the exporter under Section 114 (iii) of Customs Act, 1962. He also imposed penalty of Rs.10,00,000/- on the Shipping Line under Section 114 (iii) of customs Act, 1962.
2. Heard both the sides and perused the records.
3. Brief facts of the case are that the exporter dispatched container No. PMLU 9019810 consisting of 7 packages (1set) of LAPP SEAM WELDER, from their factory. The said container was loaded on the Vessel M.V. Deja Bhum V.25 sailing on 20.08.2006, though the documents were showing the name of Vessel as M.V. Kota Periwara sailing on 24.08.2006. The goods were being exported under Central Excise Seal. Subsequently, it was found that the said container was shipped without Shipping Bill, supervision of the Customs and Let Export Order by the proper officer of the Customs in Vessel M.V. Deja Bhum. The said Vessel sailed on 20.08.2006.
4. It is seen that the consignment for export was stuffed in the container in the factory of the exporter under the supervision of the Central Excise Officer. The necessary documents like invoice, packing list and ARE-1 Form were also filed by them for the export of the said consignment. The consignment was examined by the officer of Central Excise, who sealed the consignment under their Central Excise seal as well as bottle seal. The container was delivered to the Custom at NSI Gate in the early hours of 19.08.2006 along with all the documents. The check-list for the Shipping Bill was filed and thereafter the container was delivered to the Custom at NSI Gate. The container was accepted/taken into the port and the check list for the Shipping Bill and the other document were endorsed by the proper officer of the Customs. The said documents were taken to the proper officer of Customs, who would endorse the Let Export Order on the Shipping Bill. Since 20.08.2006 was a holiday (Sunday), the CHA could present the documents before the proper officer for granting the Let Export Order only on 21.08.2006. Soon after the Let Export Order was endorsed on the Shipping Bill, the CHA had forwarded the Exporters copy of the Shipping Bill to the Shipping Line so that the container could be loaded on the Vessel M.V. Kota Periwara, which was to sail on 24.08.2006.
4.1 From the above sequence of events, it is clear that the exporter did not have any intention to export the container in any manner, which is in contravention of the Customs Act, 1962. There is no lapse on their part in the export of the goods. The goods had been exported under a letter of credit and they had received the remittance also. Since the export was under EPCG Scheme, there could be no reason for them not to export the goods in accordance with the provision of Customs Act, 1962.
5. There is no evidence of any incriminating conduct against the exporter. There is no implicatory allegation in the show cause notice and/or evidence against them so as to attract the provisions 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 (J159) (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 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 of Rs. 5,00,000/- on them is not warranted in the facts and circumstances of the case. The same is set aside.
6. The subject goods, loaded on the vessel without the Let Export Order from the proper officer of Customs, were not placed under seizure or were not assessed provisionally at the time of export. The exporter did not furnish any bond/undertaking at the time of its export. The goods in dispute were not available for confiscation at the time of passing the impugned order. It is seen that one of the question of law raised in the appeal filed by the Revenue before Punjab and Haryana High Court in the case of Raja Impex Pvt.Ltd was whether redemption fine under Section 125 of the Customs Act, 1962 can be imposed where the goods were neither available for confiscation nor cleared under bond/undertaking. The Honble High Court, after considering the Apex Courts judgement in the case of Western Components reported in 2000 (115) ELT 278 (SC), held that redemption fine cannot be imposed in the absence of the goods, which had already been released by the Customs authorities to the importer, without execution of any bond/undertaking by the latter. This judgement is reported in 2008 (229) ELT 185 (P&H). Larger Bench of the Tribunal in the case of Shiv Kripa Ispat (Pvt.) Ltd. Vs. Commissioner of Central Excise, Nashik and Commissioner of Customs Vs. Rishi Ship Breakers vide Order No.M/43-44/09/SMB/LB dated 19.01.2009, relying upon the Punjab and Haryana High Court Judgement in the case of Raja Impex Pvt.Ltd, (supra), has held that the goods cannot be confiscated and fine in lieu of confiscation cannot be imposed if the goods are not available for confiscation (excluding the cases where the goods are initially seized and provisionally released). Similar view was taken by the Tribunal in the case of Chinku Exports vs. Commissioner of Customs, Calcutta-1999 (112) ELT 400 (T), which decision has been upheld by the Supreme Court as reported in 2005 (184) ELT A36(SC).
6.1 Following the ratio of the case laws cited above. I hold, that the impugned goods cannot be confiscated and the redemption fine cannot be imposed as the goods are not available for confiscation. Hence, the redemption fine of Rs. 5,00,000/- imposed on the exporter is set aside.
7. The learned JDR has cited the Tribunals 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. However, it appears 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.
8. As regards Shipping Line is concerned, they have contended that the container was loaded on M.V. Deja Bhum V.25 which sailed on 20.08.2006; that the container was loaded as per instruction received from shipper and their forwarder for via change loading; that the Vessel was supposed to berth on 20.08.2006 but it was pre-poned by the terminal and the vessel berthed on 19.08.2006 night; that after they realized that the CHA had done a mistake they had given them amendment copy of shipping bill without amending it in Customs Systems. They further contended that the goods in question have already been exported. Hence the provisions of Section 113 of the Customs Act, 1962 cannot be invoked for the confiscation of the goods already exported and penalty cannot be imposed. They relied on the Tribunals Judgement in the case of K. Kamala Bai Vs. Commissioner of Customs and Central Excise Trichy [2005 (186) ELT 459 (Tri.-Chennai)] in support.
9. I have examined the position. I find that as per procedure, the Shipping Line can load the container only after the exporters copy of the Shipping Bill containing the Let Export Order of the proper officer of Customs is handed over to them by the Shippers or his agent. Whereas in the instant case, the Shipping Line had loaded the container on board the Vessel M.V. Deja Bhum on 20.08.2006 without even receiving the exporters copy of the Shipping Bill. The Vessel M.V.Deja Bhum said on 20.8.2006. As per the Shipping Bill, the container was to be loaded on Vessel M.V. Kota Periwara, which was to sail on 24.08.2006, whereas the Shipping Line had loaded the container on vessel M.V. Deja Bhum, which sailed on 20.08.2006. It is for the Shipping Line to take on board only those containers in respect of which Let Export Order is given by the proper officer of Customs. Thus it is evident that the Shipping Line have knowingly loaded the container on the vessel M.V. Deja Bhum, V.25 without having the Shipping Bill and Let Export Order on the Shipping Bill from the proper officer of Customs thereby violating the provisions of Section 40 of the Customs Act, 1962. By their conduct, they have rendered the goods liable to confiscation under Section 113(g) of the Customs Act, 1962 and rendered themselves liable to penal action under Section 114(iii) of the Customs Act, 1962. Although the goods are not available for confiscation and hence cannot be confiscated and redemption fine in lieu of confiscation cannot be imposed yet the penalty under Section 114(iii) ibid is imposable on the Shipping Line for their act of omission and commission for rendering the subject goods liable to confiscation. Keeping in view the fact that the Customs Authorities had issued the Let Export Order a day later, there is a case for leniency. Accordingly, the penalty on the Shipping Line is reduced to Rs.5,00,000/- only.
10. The case law in the case of K Kamala Bai (supra) is in relation to the exporter and not in relation to the Shipping Line. Hence, its ratio cannot be applied to the Shipping Lines, which are governed by the provisions of Section 40 of the Customs Act, 1962. The contravention of Section 40 of the Customs Act, 1962 by the Shipping Line, renders the export goods liable to confiscation under Section 113(g) ibid and the Shipping Line liable to penalty under Section 114 ibid.
11. The appeal filed by the exporter is allowed. The appeal filed by the Shipping Line is partially allowed. The impugned Order passed by the Commissioner stands modified to the above extent.
(Pronounced in court on /04/2009)
A.K. Srivastava
Member (Technical)
Sm
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