Custom, Excise & Service Tax Tribunal
M/S. Kismat Cleaning Agency vs Commissioner Of Customs (Acc & Import), ... on 6 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. C/87444/15-Mum [Arising out of Order-in-Appeal No. MUM-CUSTM-AMP-APP-351 to 357/14-15 dated 27/08/2015 passed by the Commissioner of Customs (Appeals), Mumbai-III] For approval and signature: Honble Mr. Ramesh Nair, 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 : No
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?
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M/s. Kismat Cleaning Agency
:
Appellant
VS
Commissioner of Customs (ACC & Import), Mumbai
:
Respondent
Appearance
Shri Prashant Patankar, Consultant with Shri Sandip Batwal, Advocate for the Appellant Shri S.J. Sahu, Asstt. Commr. (A.R.) for the Respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial) Date of hearing: 06/04/2016 Date of decision: 06/04/2016 ORDER NO.
Per : Ramesh Nair The appeal is directed against Order-in-Appeal No. MUM-CUSTM-AMP-APP-351 to 357/14-15 dated 27/08/2015 passed by the Commissioner of Customs (Appeals), Mumbai-III, whereby the Ld. Commissioner (Appeals) upheld the penalty of Rs. 25,000/- imposed on the appellant by the adjudicating authority.
2. The fact of the case is that M/s. Indo Unique Trading Pvt. Ltd. had filed a Bill of Entry No. 3740362 dated 08-06-2011 through Customs House Agent M/s. Kismat Cleaning Agency (present appellant) for clearance of imported goods by declaring the same as Pair of Porcelain Dolls. The value of goods was declared as US$ 850. On physical examination of the goods by the Wildlife authorities revealed that the statues were made of natural ivory and import of ivory and its articles are prohibited under the Foreign Trade Policy and trade and commerce of the imported ivory is prohibited in India under the Wildlife (Protection) Act, 1972. The case was investigated by the SIIB(I), wherein it was found that initially the CHA submitted commercial invoice No. 7980 dated 24-05-2011 thru which the goods were sold to Mrs. Kusum Kedia. Subsequently the same number and date invoice was submitted alongwith Bill of Entry indicating goods were sold to M/s. Indo Unique Trading Pvt. Ltd. thereafter Shri Prem Kedia, director of M/s. Indo Unique Trading Pvt. Ltd. on 20-06-2011 submitted third set of documents wherein the invoice dated 25-02-2011 showed description of goods as Japanese figures of man and woman and value of US$ 11000. In view of this fact, a show cause notice was issued alleging mis-declaration of goods and value of goods, consequently prohibited goods attempted to be imported. The adjudicating authority confirmed the charges of the show cause notice whereby the goods have been absolutely confiscated and penalties were imposed on M/s. Indo Unique Trading Pvt. Ltd., Shri Prem Kedia and Mrs. Kusum Kedia under Section 112A and Section 114AA of Customs Act. A penalty of Rs. 25000/- was imposed on the appellant under Section 114AA of the Customs Act, 1962. Aggrieved by the Order-in-Original, the appellant filed an appeal before the Commissioner (Appeals) for waiver of penalty of Rs. 25000/-. The Ld. Commissioner (Appeals) upheld the penalty; therefore the appellant is before me.
3. Shri Prashant Patankar, Consultant with Shri Sandip Batwal, Advocate appeared on behalf of the appellant. He submits that even though there is a mis-declaration of goods and value, but the appellant was no where involved in this act of mis-declaration. He submits that initially when the appellant received invoice in the name of Mrs. Kusum Kedia, they found some discrepancy such as the I.E.C. was not in the name of Mrs. Kusum Kedia, but it was in the name of M/s. Indo Unique Trading Pvt. Ltd. and there were some other discrepancies like date and country of origin not mentioned. Therefore, the appellant informed to the overseas freight forwarder M/s. Encore Forwarding Inc., New York who booked the consignment. Thereafter the appellant CHA received the corrected invoice of the same no. wherein the description and value of the goods were same but invoice was in the name of M/s. Indo Unique Trading Pvt. Ltd. and accordingly the appellant submitted the corrected invoice alongwith the B.O.E., therefore it cannot be said that the appellant filed some dubious invoice. As per the above documentation, the actual content of goods was not known to the appellant. He further submits that the appellant CHA has exercised due diligence in clearance of the goods, accordingly, when at the time of examination the photograph of the imported goods was called and brought to the notice of custom authority that the imported goods are not matching with the photographs sent by the overseas freight forwarder M/s. Encore Forwarding Inc., New York. He submits that from the entire proceedings, no where it is coming out, the appellant was aware in advance the content of the goods and value thereof. The appellant acted bonafidely on the basis of documents produced by him. In this regard, he referred the mail correspondence by the appellant to the overseas freight forwarding agency M/s. Encore Forwarding Inc. New York, wherein the appellant sought for the documents required by the custom including the pictures of the shipment for clearance of the goods. This shows the bonafide of the appellant. He further submits that Ld. Commissioner upheld the penalty under Section 114AA only on the ground that the appellant produced two invoices in the name of two different consignees bearing same number to customs to clear the goods. This was not brought to the notice of customs by the appellant, therefore submitted dubious invoices. This allegation is totally baseless and incorrect for the reason as explained above. In support of his submission, he placed reliance on following judgments:-
(i) CC (General), Mumbai vs. Thwerdas Wadhoomal
- 2009 (240) ELT A143 (Bom.)
(ii) Thwerdas Wadhoomal vs. CC (General), Mumbai
- 2008 (221) ELT 252 (Tri.-Mum.)
(iii) Somaiya Shipping Clearing Pvt. Ltd. vs. CCE, Mumbai
- 2006 (197) ELT 552 (Tri.-Mum.)
(iv) Saffire Lithographers vs. CC, Tuticorn
- 2007 (215) ELT 210 (Tri.-Chen.)
4. On other hand, Shri S. J. Sahu, Ld. Assistant Commissioner (AR) appearing on behalf of the Revenue, reiterates the findings of the impugned order. He submits that the appellant being CHA has handled filing of B.O.E. It is admitted fact that there were two sets of invoices which were very much in the knowledge of appellant. Therefore it cannot be said that the appellant was not aware of mis-declaration of goods and value thereof. The Ld. Commissioner rightly upheld the penalty on the appellant under Section 114AA of Customs Act, 1962.
5. I have carefully considered the submissions made by both sides.
6. I find that the Ld. Commissioner (Appeals) in the impugned order, upholding the penalty under Section 114AA, given the following finding:
8. Regarding the role of Customs House Agent M/s Kismat Clearing Agency, it is observed that they filed the impugned bill of entry on the behalf of importer and on the basis of documents provided to him by importer. It is on the record that the appellant produced two invoices in the name of two different consignees bearing same number to customs to clear the goods. This was not brought to the notice of customs by the appellant. Appellant may not have known about content of the cargo but submitting dubious invoices has been intentional. Section 144 AA of Customs Act reads as-
If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular in the transaction of any business for the purpose of this act, shall be liable to penalty not exceeding five times the value of goods.
It is also noticed that CHA has not followed the rule 13(d), (e) and (o) of CHALR 2004 in this case by not bringing entire and correct facts to the notice of department. Hence, action against the appellant as provisions in the CHALR 2004 is also warranted and thus imposition of penalty on CHA under Section 114AA of the Customs Act, 1962 is justified. From the above finding, it is seen that the penalty on the CHA was imposed mainly for the reason that there were two invoices, one in the name of Mrs. Kusum Kedia and subsequently invoice was changed to M/s. Indo Unique Trading Pvt. Ltd. In this regard, it observed from the facts and the submissions that the first invoice was in the name of Mrs. Kusum Kedia, however there was no I.E.C. in the name of Mrs. Kusum Kedia. The invoice also had some errors regarding country of origin and date. Since against this invoice, the goods could not have been cleared, the CHA informed this discrepancy to the overseas freight forwarding agency M/s. Encore Forwarding Inc., New York. Thereafter, the same numbered invoice was issued which was in the name of M/s. Indo Unique Trading Pvt. Ltd., which posses the I.E.C. In both the invoices, it is observed that the description and value of the goods remained same. With the above change of invoice, I do not see anything wrong on the part of the appellant regarding his role in mis-declaration of goods and value thereof. The corrected invoice which he has obtained was part of his duty as the invoice of Mrs. Kusum Kedia could not have been produced for clearance of the goods. Therefore, while clearing of the goods, the proper and correct invoice was produced. From the entire facts and circumstances of the case, I do not find anything on record, which suggest that the appellant was aware of the content and nature of goods which was subsequently found as two statues made of ivory and other materials which was prohibited. As per Section 114AA, the penalty can be imposed only if a person has knowledge about the false declaration in the documents. As I stated above, as regard the content and nature of the goods and value thereof, the appellant had no knowledge. Therefore, they are not liable for penalty under Section 114AA. As regard findings of the Ld. Commissioner that the CHA has not followed the rule 13(d), (e) and (o) of CHALR 2004, however the Ld. Commissioner has not given reason how the appellant has contravened the aforesaid provision. Moreover as I discussed above, the whole case is that the goods imported was found different from the goods declared in the invoice and before the customs authority as I already discussed above that in this particular mis-declaration, the appellant was not a party as they did not have any knowledge about that. Therefore, it cannot be alleged that the appellant has not followed the provision of Rule 13(d), (e) and (o) of CHALR, 2004.
7. The judgments relied upon by the counsel supports the case of the appellant. As per my above discussion, I am of the considered view that the appellant is not liable for penalty under Section 114AA in the given facts and circumstances of the case. The impugned order relates to the appellant M/s. Kismat Clearing Agency, is set aside and the appeal is allowed.
(Operative part pronounced in court) Ramesh Nair Member (Judicial) saifi 8 C/87444/15-Mum