Custom, Excise & Service Tax Tribunal
East West Freight Carriers Ltd. vs Cc (General) Mumbai on 8 January, 2019
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/516/2012
Arising out of: Order-in-Original No. 14/2012/CAC/CC
(G)/SLM dated 21/03/2012
Passed by: Commissioner of Customs (General), Mumbai.
Appellants - Represented by:
East West Freight Carriers Ltd Mrs. Pooja Reddy, Advocate
versus
Respondent - Represented by:
C.C (General), Mumbai Shri Manoj Kumar, Assistant Commissioner (AR) Date of hearing 30/10/2018 Date of pronouncement 08/01/2018 CORAM Hon'ble ShriAjay Sharma, Member (Judicial) Hon'ble Shri Sanjiv Srivastava, Member (Technical) ORDER NO: A/85026 / 2019 Per: Ajay Sharma The instant Appeal has been filed from the Order-in-Original No. 14/2012/CAC/CC (G)/SLM dated 21/03/2012 passed by Commissioner of Customs (General), Mumbai The Appellants harein i.e. M/s. East West Freight Carriers Ltd are transacting business in the Custom House as Custom House Agents Having been duly licensed by the Commissioner of Customs C/516/2012 2 under the Custom House Agents Licensing Regulations, 1984 (Now Custom House Agents Licensing Regulations, 2004)
2. The Appellants submit that, as CHA for their clients, the Appellants file declarations and the necessary documents as are required to be filed with the department for the purpose of check-list and generation of Shipping Bill through their employees. The Appellants have always been following this procedure which is the procedure laid down for the purpose of export of any goods and in accordance with the practice that is followed at the Air Cargo Complex.
3. The Appellants submit that the exporter in the instant case i.e. M/s. Accord Impex had approached the Appellants for filing declarations for which they forwarded the documents like the invoice, packing list, etc. and on the basis of such documents the necessary annexures were completed and the documents were filed with the department at the Air Cargo Complex (ACC), Sahar. The consignment to be exported was received in fully packed condition at the ACC and was presented to the proper officer nominated by the system for the purpose of examination. This was on 10-01-2008.
4. The Appellants Submit that M/s Accord Impex provided copies of shipping bills, invoices and packing lists etc. for the export of three consignment of Leather goods, namely, Shipping Bill nos. 6633337, 6633345 and 6633354 on 10.01.2008 and accordingly on the same C/516/2012 3 day the Appellants filed the necessary declarations and documents with the department at the Air Cargo Complex. Check lists were generated by the department for the three consignments with three Shipping Bills Nos. 6633337, 6633345 and 6633354 all dated 10.01.2008. The total FOB declared therein was Rs. 26,19,045/- and drawback amount claimed was Rs. 2,22,618/-. The goods were being exported to M/s Darwish Ibrahim Traders, Dubai.
5. The Appellants submit that at about 5 PM on 10.01.2008 the goods were received in fully packed condition at the Air Cargo Complex and on this basis the documents were filed with the department and in accordance with the procedure the employee of the Appellants presented the goods/consignments for examination by the proper officer. This was also on the same day at about 5:45 PM which is within few minutes of receipt of the consignments. Examination of the said consignment was also taken up on the same data but apparently for the reason that the goods being examined appeared to be of substandard quality, the consignment were held up.
6. The Appellants further submit that, the said consignment were taken up for examination on 11.01.2008 and it was prima facie found that the goods were overvalued with an intention to avail higher duty drawback, than what the exporters were eligible to. Investigations were carried out and the statement of the concerned exporters were recorded. Statement of the employees of the Appellants also were C/516/2012 4 recorded wherein they had categorically given the details as to how and in what manner the consignments came to be received by them and the way the export of the said consignments was attended to by the employees of the Appellants. The investigations also revealed that similar consignments have been exported in the past in the same manner and under claim for duty drawback by the said exporter and that drawback has been sanctioned to the said exporter.
7. The Appellants submit that during the investigation market inquiry was conducted and it was allegedly ascertained that the goods in question have been overvalued with the intention of claiming excess amount of drawback and that total FOB value of the export goods was Rs. 14,53,737/- and the amount of duty drawback admissible to the exporters on the value so determined was Rs. 1,45,374/- while the exporters had declared the total FOB value of Rs. 26,19,045/- and had claimed duty drawback amounting to Rs. 2,61,905/-, thus leading to the conclusion that the exporters had resorted to overvaluation of the goods with a fraudulent intention to avail excess duty drawback amounting to Rs. 1,16,531/-.
8. The Appellants submit that accordingly a show cause notice was issued to the exporter on 09.07.2008 under F. No. SIIB/Gen- 07/2008ACC calling upon the exporters to show cause against certain proposals contained in the show cause notice which included confiscation of the goods and imposition of penalty for acts of C/516/2012 5 omission and commission alleged in the show cause notice. The show cause notice was issue only to the exporter and the Appellants were not called upon for any purpose whatsoever apparently for the simple reason that there was no act of omission or commission on the part of the Appellants in relation to the export of the said goods. A copry of the said show cause notice is enclose herein at Exhibit- 'A'.
Unit Quantity FOB Value DBK
Sr. S/Bill No. Date Description Price (RS.) Claimed
No. (Rs.) (Rs.)
1. 663337 10.01.2008 Leather 369 2316 855327.75 72702.86
Walletss
2. 6633345 10.01.2008 Leather 369 2304 849104.64 72173.89
Walletss
3. 6633354 10.01.2008 Leather 369 2487 914612.9 77742.1
Walletss
Total 7107 26,19,045.29 2,22,618.85
9. The Appellants further submit that the said show cause notice was adjudicated by the Commissioner of Customs (Export), Air Cargo Complex, under Order-in-Original No. CAO No. CC/PMS/46/2008 ADJ. ACC dated 29.10.2008 wherein the goods under export under the said 3 shipping bills were held liable to confiscation and penalty also has been imposed on the exporter. The said order does not contain any adverse remarks about to the Appellants or the employees. A copy of the said order is enclosed herewith at Exhibit- 'B'.
10. The Appellants submit that much after the said show cause notice was issued and much after said order was passed by the Commissioner of Customs (Export), a notice was issued to the Appellants under F. No. S/8-55/2008 Admn dated 29.04.2004 under C/516/2012 6 Regulation 22 of the Custom House Agents Licensing Regulation, 2004, wherein charges were framed against the Appellants and inquiry was proposed to be conducted. The statement of the employees of the Appellants along with copy of the show cause notice were listed in the list of documents contained in Annexure-III by which the charges framed against the Appellants were proposed to be sustained. The notice did not contain any proposal to examine any witnesses in support of the charges or to sustain the charges framed against the Appellants in the said notice. A copy of the said notice along with the Annexure are enclosed herewith at Exhibit-'C'.
11. On the basis of the order issued by the Commissioner of Customs (General), Mumbai, inquiry was conducted by the Deputy Commissioner of Customs. During the course of the inquiry proceedings, even though no witnesses were proposed to be examined on behalf of the Department yet, the two employees of the Appellants were examined on behalf of the Department.
12. During the course of examination of the witnesses by the Department, the witness confirmed the contents of the statement recorded during the course of investigations and during the course of the cross-examination explained that the consignment has been received at the Air Cargo Complex at about 5:00 PM and that immediately thereafter all the necessary formalities were completed which include registration, unloading and carting of the cargo and the consignments were presented for examination by about 5:45 PM. During the course of the cross-examination, the said witness also C/516/2012 7 explained that similar consignments were exported by the same exporter in the past and that on each occasion the proper officers of the Department had examined the cargo and allowed the consignments to be exported on being satisfied about the value of the goods being exported. He also added that, normally it takes longer time for presentation of the cargo and in the present case there is no delay in the presentation of the cargo or in filing of the documents relating to the export of the said consignments. A copy of the record of examination-in-chief and cross-examination of the witness, Shri Rex Alex Nunes, employee of the Appellants, dated 29.10.2009 is enclosed herein with at Exhibit-'D'.
13. Subsequent thereto, the Presenting Officer submitted his brief wherein, without taking into consideration the evidence that has come on record, the Presenting Officer submitted that the charges are proved. A copy of the brief submitted by the presenting officer on 30.04.2010 is enclosed herewith at Exhibi-'E'.
14. The Appellants submit that a copy of the said brief was made available to the Appellants and the Appellants vide their letter dated 12.05.2010 made detailed submissions demonstrating as to why and for what reasons the charges framed against the Appellants cannot be held as proved or rather that they are required to be held as proved to be false. A copy of the detailed submissions made on behalf of the Appellants is enclosed herein at Exhibit-'F'.
15. The Appellants submit that, the Learned Inquiry Officer (IO) after taking into consideration the submissions made on behalf of the C/516/2012 8 Department as well as the Appellants and also the evidence that had been brought on record during the course of the inquiry proceedings, submitted his report wherein it has been held by the Learned Inquiry Officer that the Articles of Charges framed against the Appellants are not approved. A copy of the said inquiry report is enclosed herewith at Exhibit-'G'.
16. The Appellants submits that while holding that the charges framed against the Appellants are not proved the Learned Inquiry Officer observed as under:
Article of Charge-I
(a) The charge under Article Charge-I related to the alleged contravention of Regulation 13(n) of the CHALR, 2004. It was alleged therein that the Appellants had failed to discharge their duties as the CHA, with utmost speed, efficiency and without avoidable delay.
(b) The inquiry officer found that though the above said charge was made against the Appellants, no evidence had come on record to say that there was any delay or inefficiency on the part of the Appellants as the CHA. The inquiry officer noted that on the contrary from the sequence of events as have come out on record, in the form of evidence of the two witnesses showed that the cargo was received near the Air Cargo Complex at about 5 pm. The documents were immediately received by the employee of the Appellants, Shri Rex Alex Nunes, from the officer of the Appellants.
C/516/2012 9 The I O reasoned that this indicated that the documents were ready even before the cargo had arrived at the Air Cargo Complex.
(c) Soon after the cargo arrived, the documents of the cargo were received by Shri Rex Alex Nunes, formalities of registration were completed and the cargo was presented before the proper officer, nominated by the systems for the purpose of examination.
(d) There was no allegation anywhere that the documents presented were not in accordance with the procedure relating to the clearance of export goods.
(e) These facts which had come on record and remained uncontroverted showed that there was no delay or inefficiency on the part of the employees of the CHA with reference to the three Shipping Bills in question In view of the above the Inquiry Officer stated that he was constrained to hold that the charges as contained in Article of Charge-I was not proved.
Article of Charge-II
(a) Article of Charge-II related to failure on the part of the Appellants to ensure the conduct of their own employees which rendered them liable to action under Regulation 19(8) of CHALR, 2004.
(b) After going through the record and the submissions made in this regard, the Inquiry Officer stated in his C/516/2012 10 report that he found the charge framed against the Appellants was not established. He reported that the charge was based on the alleged fact that there was misdeclaration of value with reference to the cargo entered for exportation under the three shipping bills; that neither the notice nor the submissions made by the Presenting Officer specified any provision of the CHALR, 2004, which imposes a responsibility or obligation on a Cha or his employee to check, verify the contents of the cargo or to verify the value to ascertain whether the declarations made by the exporter are correct or otherwise; He further observed in his report that during the course of inquiry proceedings, the witnesses examined by the department had categorically stated these facts; that yet nothing was brought on record to say that any particular provision imposing any such obligation or responsibility on a CHA.
The IO also noted that during the course of proceedings, the witnesses examined by the department had stated plainly that they are not permitted to open the package, which normally comes in the sealed condition because there would be complaints and allegations of thefts or substitution; even though this was what was clearly stated by the department's witness, yet, no evidence was brought on record to say that this contention was not true C/516/2012 11 in view of any specific provisions of law; since the charge basically was that of misdeclaration of the export cargo, in terms of value and no allegations of aiding or abetting were made against the Appellants, the charge of misconduct on the part of the employees cannot sustain; Consequently the charge that there was a failure on the part of the Appellants to ensure proper conduct of the employees cannot be upheld. Accordingly, the Inquiry Officer held that this charge too was not proved. (Pronounced in Court on .....................) (Sanjiv Srivastava) (Ajay Sharma) Member (Technical) Member (Judicial) arch