Custom, Excise & Service Tax Tribunal
Mehta Exports vs Commissioner Of Central Excise, Mumbai on 6 April, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. IV APPEAL Nos. C/982 & 1030/08 (Arising out of Order-in-Original No. 96/2008 // S/10-100/07-08 Adj.(X) S/6-Gen-811/06Exp dated 24.7.2008 passed by Commissioner of Customs (EP), Sheva) For approval and signature: Hon'ble Mr. P.G. Chacko, 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?
====================================================== Mehta Exports Appellant Mahendra Shipping Agency Vs. Commissioner of Central Excise, Mumbai Respondent Appearance: None for appellant Shri T. Tiju, Authorised Representative (JDR), for respondent CORAM: Hon'ble Mr. P.G. Chacko, Member (Judicial) Date of Hearing: 6.4.2009 Date of Decision: 6.4.2009 ORDER NO.................................
M/s. Mehta Exports, one of the appellants, had filed three shipping bills through their CHA, viz. M/s. Mahendra Shipping Agency, the other appellant, for export of Chick peas, Kabuli yellow and Dill seeds totally valued at Rs.23,18,955/- (FOB). Two of the shipping bills were filed on 8.4.2006 and the third one on 3.4.2006. Let Export Order for the goods covered by the third shipping bill was given on 12.4.2006 and the goods were shipped on 9.4.2006. Obviously, the goods were exported prior to issuance of Let Export Order. On the basis of a finding to this effect, the department issued a show-cause notice dated 8.1.2008 under Section 124 of the Customs Act, wherein the exporter and their CHA were sought to be penalised under Section 114(iii) of the Customs Act on the ground that they had, by their commissions/omissions, rendered the above goods liable to confiscation under Section 113(g) of the Act. The goods were proposed to be confiscated also. The show-cause notice contained a proposal to impose penalty on the Shipping Line also under the same penal provision. In adjudication of this notice, the Commissioner (a) ordered confiscation of the goods under Section 113(g) and imposed fine of Rs.5,00,000/- on the exporter in lieu of confiscation, under Section 125, (b) imposed a penalty of Rs.50,000/- on the CHA under Section 114(iii) of the Act and (c) imposed a penalty of Rs.2,00,000/- on the Shipping Line under Section 114. No appeal was filed by the Shipping Line. In appeal No. C/982/08, the exporter is aggrieved by the above redemption fine of Rs.5,00,000/-. In the other appeal, the CHA has challenged the penalty imposed on them.
2. There is no representation for any of the appellants despite notice, nor any request for adjournment. I have examined the records and heard learned DR.
3. It is not in dispute that the goods were shipped prior to issuance of Let Export Orders. Section 50 of the Customs Act provides that the exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel, a shipping bill in the prescribed form. It further provides that the exporter, while presenting a shipping bill, shall, at the foot thereof, make and subscribe to the declaration as to the truth of its contents. Under Section 51 of the Act, the proper officer of customs may make an order permitting clearance and loading of the goods for exportation, where he is satisfied that the goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same. It is abundantly clear from these provisions that an exporter who has filed shipping bill, has to wait for permission of the proper officer of customs for clearance and loading of the goods for exportation. In the instant case, the Let Export Orders were issued on 10.4.2006 and 12.4.2006 whereas the goods were shipped on 9.4.2006. Evidently, the exporter committed breach of Section 51 of the Customs Act. Nevertheless, the learned Commissioner has chosen not to impose any penalty on them and the department has chosen not to file any appeal against the Commissioner's order. The grievance of the exporter is that the Commissioner imposed severe and harsh redemption fine of Rs.5,00,000/- without application of mind to the relevant aspects of the case. It is submitted that a fine in lieu of confiscation cannot be imposed in the absence of the goods. On a perusal of the exporter's reply to the show-cause notice, I find that any plea of the above kind was not raised by the party and, therefore, the Commissioner had no occasion to consider the question whether redemption fine was liable to be imposed on the party under Section 125 of the Customs Act in the absence of the goods. Whether the goods were available for confiscation is a question of fact. Whether any fine could be imposed on the exporter under Section 125 in lieu of confiscation of the goods, in the absence of the goods, is a question of law. A mixed question of fact and law has to be specifically pleaded by the party concerned. This did not happen in this case. In the circumstances, the prayer of the exporter for setting aside the fine imposed on them under Section 125 of the Customs Act and in terms of Section 113(g) of the Act cannot be accepted. Appeal No. C/982/08 is dismissed.
4. The remaining appeal filed by the CHA is against penalty of Rs.50,000/- imposed on them under Section 114(iii) of the Act. Confiscation of the goods in terms of Section 113(g) of the Act is irresistible in this case inasmuch as, admittedly, the goods were shipped without Let Export Order under Section 51 of the Act. The question remains as to whether the CHA is liable to be penalised under Section 114(iii) of the Act on the ground that, by commissions or omissions, they rendered the goods liable to confiscation. In this appeal, the CHA says that they were not aware of the sailing of the vessel on 9.4.2006. Any claim by an exporter or his CHA that he was not aware of export of the goods cannot be accepted as it defies logic and the express provisions of law. The manner in which a CHA should function in relation to any goods for import or export has been provided under the Customs House Agents Licensing Regulations, 2004. The obligations of a CHA are wide enough to extend upto the point of export of goods as in the present case. The appellant cannot plead ignorance of the date of shipment of the goods. That the exporter was not penalised for the same offence is a different matter. The CHA cannot escape their penal liability under Section 114 of the Act. The quantum of penalty imposed on them is reasonable. This appeal is also dismissed.
(Pronounced in Court) (P.G. Chacko) Member (Judicial) tvu 1 6