Custom, Excise & Service Tax Tribunal
M/S. Emirates Shipping Agencies (I) ... vs Commissioner Of Customs, (Export), ... on 26 February, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. C/103, 139/08 (Arising out of Order-in-Original No. 35/2007 dated 20.11.07 passed by the Commissioner of Customs (Export), Jawarhar Customs House, Nhava Sheva For approval and signature: Honble Shri A.K. Srivastava, Member (Technical) ============================================================
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M/s. Emirates Shipping Agencies (I) Pvt. Ltd.
:
Appellants
M/s. L. G. Electronics India Pvt. Ltd.
VS
Commissioner of Customs, (Export), Nhava Sheva
Respondents
Appearance
Mrs. Aarti P. Bhide, Advocate for
Emirates Shipping Agencies (India) Pvt. Ltd.and
Shri Prashant Patankar Advocate for L.G. Electornics Ltd. for Appellants
Shri P.K. Agarwal, Authorized Representative (SDR)
CORAM:
Shri A.K. Srivastava, Member (Technical)
Date of hearing : 26/02/2009
Date of decision /03/2009
ORDER NO.
Per : Shri A.K. Srivastava, Member (Technical)
These appeals have been filed by M/s. L.G. Electronics India Pvt. Ltd., Pune (hereinafter referred to as exporter) and M/s. Emirates Shipping Agencies (I) Pvt. Ltd., Navi Mumbai (hereinafter referred to as Shipping Line) against the Order-in-Original No. 35/2007 dated 20.11.2007 passed by the Commissioner of Customs (Export), JNCH, Nhava Sheva. The Commissioner, vide the impugned order, held that the impugned goods exported under the Shipping Bill No. 4565816 dated 02.09.06 valued at Rs. 32,67,993/-. FOB are liable to confiscation. Accordingly, he ordered for confiscation of the goods, though the goods were not available for confiscation. He gave an option to the exporter to redeem the goods on payment of fine of Rs.5,00,000/-. He has also imposed penalty of Rs.3,00,000/- on the exporter and Rs. 7,00,000/- on the Shipping Line under Section 114 (iii) of the Customs Act, 1962.
2. Heard both the sides and perused the records.
3. The brief facts of the case are that the exporter dispatched five containers of refrigerators from their factory on 01.09.2006 for export to Morocco. The containers were stuffed in the factory of the exporter. The consignment was planned for export per Vessel MV Emirates Freedom Voy No. 635W scheduled to sail on 4th September, 2006. The consignment was handed over to the Customs House Agent (CHA) for clearance and the CHA filed the Shipping Bill No. 4565816 dated 02.09.2006. The containers were entered into the Port/Terminal on verification of seals by the Customs Officers. The CHA informed the Shipping Line that they would complete the Customs procedure and hand over the Shipping Bill duly endorsed by Customs on 04.09.2006 the scheduled date for sailing. However, berthing of the vessel was advanced to 2nd September, 2006 instead of scheduled 3rd, September 2006. The Shipping line loaded the said containers on Vessel MV Emirates Freedom Voy No. 635W without receipt of Shipping Bill duly endorsed by the proper officer of Customs with Let Export Order (LEO) and the Vessel sailed on 03.09.2006. Proceedings were initiated, which culminated in the impugned order as referred to above.
4. The Commissioner has observed that it was the duty of the exporter to complete the Customs procedure and hand over the documents duly passed by the proper officer of Customs to the Shipping Line for final loading or otherwise inform the Shipping Line above the latest position. He could not find any evidence to show that the exporter had made any genuine attempt to stop the containers from being loaded before sailing of the vessel. He observed that the exporter had failed to perform their duty properly as they did not inform the Shipping line to stop the containers from being loaded without the supervision and approval of the officers of Customs.
5. However, I find that the Commissioner has not cited as to what should have prompted the exporter to stop the containers, which they believed were to be loaded on 4th September, 2006. The CHA did get the Shipping Bill passed in due course of time. No. specific omission or commission on the part of the exporter has been cited, which made the export goods liable to confiscation.
6. The Shipping Line did not inform the exporter that the vessel would sail on 03.09.2006 instead of the scheduled departure on 04.09.2006 and that the containers were being loaded. The shipping line loaded the containers without the shipping bill duly endorsed by the proper officer with Let Export Order and without the knowledge of the exporter. The exporter had filed the Shipping Bill on 2nd September, 2006. Unless exporter knew that Shipping Line would load the containers without the permission of proper officer, there was no way the exporter could have done any thing to stop the loading of containers. The Commissioners order is silent as to whether the Let Ship Order was granted by the proper officer of Customs approving the loading list.
7. The Commissioner himself has noted that the CHA had assured to hand over the customs clearance documents on 4th September, 2006 with reference to the submissions by the Shipping Line. Therefore, there was no reason for the exporter to make any pro-active efforts before 4th September, 2006 unless the Shipping Line informed the exporter about the change in the schedule of the vessel berthing/sailing.
8. The exporter were not going to gain anything by loading the containers without customs clearance. The goods under export were neither prohibited good nor Customs duty was attracted upon their export. There is also no misdeclaration of any kind alleged in the Shipping Bill, which was filed before loading of the consignment on the vessel.
9. The exporter never intended, planned or suggested the CHA/Shipping Line to load the containers on the vessel without the permission of the proper officer of Customs. It is not a case against the exporter that the loading of the containers on the vessel without Let Export Order by the proper officer of customs was at the behest of the exporter or in their presence. The exporter never instructed or pressurized or induced the Shipping Line or the CHA to cause loading of the containers without the permission of the proper officer. There is no evidence of any incriminating conduct against the exporter. There is no implicatory allegation in the show cause notice against them. 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.
10. The learned SDR has cited the Tribunal 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.
11. In the light of the discussions foregoing, I hold that the penalty of Rs.3,00,000/- under Section 114(iii) of the Customs Act, 1962 is not impossible on the exporter. The same is set aside.
12. 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).
13. 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.
14. So far as the Shipping Line is concerned, they have contended that the vessel M.V. Emirates Freedom under Voy 635W was scheduled to arrive on 03/09/2006 and it was scheduled to depart on 04/09/06. However, due to the availability of the window birth on the terminal GT1, the authorities of the terminal requested them and then advanced berthing of the vessel from 03/09/06 to 02/09/06. That as a result of the same, the advance list and planning for the vessel had to be advanced further. As per the operating procedure, a Shipping line has to submit the advance loading list of the containers to the terminal/customs authorities for loading the containers on board. The CHA of the shipper sent advance loading list for loading of the five containers on the vessel vide e-mail dated 02.09.2006. The cargo containers were allowed to enter the terminal on the basis of the invoice/check list of the said containers to the terminal/Customs for loading the containers on board after the customs officials duly checked the seal of the containers, which were stuffed and sealed at the premises of the shipper under the inspection of the officials of the Central excise, making the cargo legitimate for exports. 03.09.2006, being Sunday, the CHA of the shipper could not be contacted for follow up regarding the Shipping Bill. Loading of the containers on the vessel is undertaken by the Port/Terminal authorities under the supervision of the Customs Preventive officials. There are lapses on the part of the Customs Authorities and the Port authorities. They had no choice but to take instruction from the CHA, who assured to produce the LEO on the next working day. They had no mal-intention to load the impugned containers without any alleged incorrect documentation procedure.
15. I have carefully considered the above submissions of the Shipping Line. I find that the responsibility of the physical loading of the containers is primarily theirs. Section 40 of the Customs Act, 1962 puts the onus on the person-in-charge of the vessel not to permit the loading of the export goods unless the Shipping Bill duly passed by the proper officer of Customs is handed over to him. The Shipping Line should have Shut Out the consignment included in the loading list, for which the Shipping Bill duly passed by the proper officer of Customs was not handed over to it. But they failed to do. Hence, the penalty is imposable on them for violating the provisions of Section 40 of the Customs Act, 1962. However, taking into consideration the submissions made by the Shipping Line, I am inclined to take a lenient view and and accordingly reduce the penalty from Rs. 7,00,000/- to Rs. 3,50,000/-.
16. The appeal filed by the exporter is allowed in full. The appeal filed by the Shipping Line in partially allowed. The impugned order passed by the Commissioner is modified to the above extent.
(Pronounced in court on /03/2009
A.K. Srivastava
Member (Technical)
Sm
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