Custom, Excise & Service Tax Tribunal
M/S Chowgule Brothers Pvt Ltd vs Cc & Ce, Visakhapatnam on 1 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. C/23564-23565/2014 (Arising out of Order-in-Appeal No. 36-39/2014-V-II Cus dt. 25.08.2014 passed by Commissioner (Appeals), CCE & ST, Visakhapatnam) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) 1. Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Chowgule Brothers Pvt Ltd., ..Appellant(s) Vs. CC & CE, Visakhapatnam ..Respondent(s)
Appearance Sh. Dinesh Aggarwal, Authorised Representative for the Appellant.
Sh. Nagraj Naik, Deputy Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 01.07.2016 Date of Decision: 01.07.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The above appeals being connected were heard together and are disposed by this common order. Appeal No. C/23564/2014 is filed by Steamer Agents and Appeal No. C/23565/2014 is filed by its Manager.
2. M/s Chowgule Brothers Private Ltd., Kakinada Steamer Agents filed EGM No. 41/2012 dated 13.01.2012 as Charter Agents in respect of vessel MV Universal Barcelona (hereinafter called as the Vessel) which was calling at Anchorage port, Kakinada for loading of 20,000 Mts. (approx) of Bagged Rice. The subject vessel is of Malta Nationality. The appellant secured port clearance from Customs department on 01.02.2012 which was valid for 72 hours i.e. till midnight of 04.02.2012. Later, vide their letter dated 04.02.2012, they requested for extension of port clearance stating that the subject vessel has not sailed from the port after completion of loading operations due to the dispute between owner and Charters. As requested by appellant the port clearance was amended and extended till midnight of 07.02.2012. On the next day, 08.02.2012, appellant surrendered the Port Clearance and informed vide their letter dt. 08.02.2012 that the dispute between owners and Shippers could not be resolved and hence the subject vessel has not yet sailed from Kakinada port. Appellant also informed that port clearance will be obtained as and when the issues gets settled after payment of necessary charges. Besides the above, appellant also informed that port clearance should not to be issued without their knowledge, if owners of the vessel approach through their Protecting Agents viz., M/s ESDI Marine Pvt Ltd. Thereafter on the very same day (08.02.2012), appellant informed the Customs Department that the vessel has already sailed out of Kakinada Port. The department issued Show Cause Notice proposing to impose penalty against appellant, its Manager Sh. T.R. Rao (appellant in Appeal No. 23565/2014), Master of the vessel and others for leaving the port without proper clearance and thus violating Section 42 of the Customs Act, 1962 ( here after referred to as the Act). The allegation against the appellant is that the appellants did not give the Port Clearance Certificate to the master of the vessel and that they are involved in the illegal sail of the vessel from the port. After adjudicating, the original authority, inter-alia imposed penalty of Rs. 1 lakh each on the appellants herein. In appeal to Commissioner (Appeals), the same was upheld. Hence the appellants are before the Tribunal.
3. On behalf of appellants, the Learned counsel Sh. Dinesh Aggarwal after referring to Section 42 of the Act, argued that there was no violation of Section 42. He submitted that port clearance was given by Customs Department till mid night of 07.02.2012. The vessel had sailed outside the port prior to mid night of 07.02.2012. Though the appellants had surrendered the original of Port Clearance Certificate 08.02.2012, the vessel had already sailed before mid night of 07.02.2012. Till mid night 07.02.2012 there was a valid port clearance issued by the Department and that therefore there was no violation of Section 42 of the Act as alleged. The allegation that the vessel sailed without authorization is not correct, because at the time of sail of the vessel there was a valid Port Clearance Certificate issued by the Department. Further that it may be correct that the appellants had some disputes with the vessel regarding the payments to be made but the appellants themselves had informed the department that the vessel has left on 07.02.2012 itself and therefore it is evident that they are not involved in any manner with regard to the allegation made in the Show Cause Notice.
4. The Learned AR Sh. Nagaraj Naik appearing for the Department contended that the Port Clearance Certificate issued by department was surrendered by the appellant on 08.02.2012. Therefore, it is clear that the vessel has sailed without holding the Port Clearance Certificate. The original port clearance certificate having been surrendered to the department the sail of the vessel from the port is without a Port Clearance Certificate. That the appellants who are Steamer Agents are required and duty bound to inform the Department regarding the illegal sail of the vessel without Port Clearance Certificate and therefore the penalty imposed is right and proper.
5. I have heard both sides and per used the records.
6. The penalty has been imposed for the reason that the vessel has left the port without Port Clearance Certificate as envisaged in Section 42 of the Act. For better appreciation Section 42 of Act is reproduced as under:
SECTION 42: No conveyance to leave without written order. (1) The person-in-charge of a conveyance which has brought any imported goods or has loaded any export goods at a customs station shall not cause or permit the conveyance to depart from that customs station until a written order to that effect has been given by the proper officer.
(2) No such order shall be given until
(a) the person-in-charge of the conveyance has answered the question put to him under section 38;
(b) the provisions of section 41 have been complied with;
(c) the shipping bills or bills of export, the bills of transshipment, if any, and such other documents as the proper officer may require have been delivered to him;
(d) all duties leviable on any stores consumed in such conveyance, and all charges and penalties due in respect of such conveyance or from the person-in-charge thereof have been paid or the payment secured by such guarantee or deposit of such amount as the proper officer may direct;
(e) the person-in-charge of the conveyance has satisfied the proper officer that no penalty is leviable on him under section 116 or the payment of any penalty that may be levied upon him under that section has been secured by such guarantee or deposit of such amount as the proper officer may direct;
(f) in any case where any export goods have been loaded without payment of export duty or in contravention of any provision of this Act or any other law for the time being in force relating to export of goods, -
(i) such goods have been unloaded, or
(ii) where the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] is satisfied that it is not practicable to unload such goods, the person-in-charge of the conveyance has given an undertaking, secured by such guarantee or deposit of such amount as the proper officer may direct, for bringing back the goods to India.
The Section states that no vessel can leave without written order given by the proper officer. It does not say that the original Port Clearance Certificate has to be in the hands of the master of the vessel while leaving the port though it may be necessary for the vessel to have the original port clearance certificate in case it is intercepted or for that matter for any other inspections. In the instant case undisputedly the department has issued Port Clearance Certificate which was valid till mid night of 07.02.2012. So also department does not have a case that the vessel sailed after mid night of 07.02.2012. Therefore, at the time of sail of the vessel from the port, there was a valid Port Clearance Certificate issued by the department. The allegation of the Department that the vessel sailed without issue of Port Clearance Certificate and in violation of Section 42 is not correct and not supported by evidence. Though the appellants surrendered the Original Port Clearance Certificate to the Department on 08.02.2012 such surrender does not have any effect as the vessel has already sailed from the port. The proceedings have been initiated only after surrender of the Port Clearance Certificate. There is no evidence to show that the vessel had sailed from the port after mid night 07.02.2012. Section 42 of the Act only says that the vessel shall not sail unless a written order is given by a proper officer. Perhaps the appellant, Steamer Agent was in possession of the Port Clearance Certificate and the Master of the ship had in possession only a photocopy of Port Clearance Certificate. Section 148 of the Act states that the principal/master of the vessel shall be liable for the acts or omissions committed by the agent and vice versa. At the time of sail of the vessel if the appellant who are Steamer Agents of the vessel were holding the Port Clearance Certificate, it cannot be said that there is violation of Section 42 if the vessel leaves the port during the validity of Port Clearance Certificate. On such score, I do not find any violation of Section 42 of the Act. The allegations raised in the SCN do not have any legal footing. In view thereof, the penalties imposed on the appellants are unsustainable. The same are set aside. The appeals are allowed with consequential reliefs, if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) Jaya.
7