Custom, Excise & Service Tax Tribunal
M/S Ups Jetair Express Pvt. Ltd vs Commissioner Of Customs, Csi Airport, ... on 22 December, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. III Appeal No. C/87613/13 (Arising out of Order-in-Original No. Commr/PMS/ADJN/22/2012-13 dated 30.3.2013 passed by the Commissioner of Customs, CSI Airport, Mumabi). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
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? ====================================================== M/s UPS Jetair Express Pvt. Ltd. Appellant Vs. Commissioner of Customs, CSI Airport, Mumbai Respondent Appearance: Shri Shadab Khan, Advcocate for Appellant Shri D.S. Maan, AC (AR) for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 27.11.2015 Date of Decision: .2015 ORDER NO. Per: Raju
The appellant is a courier company. The facts of the case are that the Applicant filed a courier Bill of Entry wherein the description of the goods was declared as Spare Parts and value was declared as Rs.2934/-. On preliminary examination of the package revealed that it contained two sets of ARRI Alexa Camera (Made in Germany) and 10 pcs of memory cards 32 GB (Made in Japan). It appeared that there was mis-declaration of goods and gross undervaluation, therefore the carton was detained. The carton was opened and examined under a panchanama in the presence of the authorised representative of the Appellant, the concerned courier company in the present case, which resulted in recovery of 2 sets of ARRI Alexa Camera alongwith view finders and accessories including cables valued at approx. Rs.30 Lakhs per piece, thus totally valued at approx. Rs. 60 Lakhs(CIF), and 10 pieces of Sony SXS Pro SBP-32GB Flash memory modules each valued at approx.. Rs.50,000/-, thus totally valued at approx. Rs. 5 Lakhs (CIF). Goods valued at Rs.65 Lakhs were seized. After issuance of show cause notice and considering reply from the noticees including the present Appellant and hearing the parties, the Ld. Commissioner adjudicated the show cause notice vide the impugned order wherein amongst other confirmation, he imposed penalty of Rs.1,00,000/- upon the Applicant on the ground that they have failed to exercise due diligence in performing their work as an authorized courier and thus, their inaction/negligence has led to this attempt of smuggling of costly goods in the guise of low value spare parts.
2. Learned Counsel for the appellant argued that the impugned order does not impose any penalty against the appellant under Section 112(a), 112(b) and 114AA which were invoked in the show-cause notice. Only penalty under Section 117 has been imposed. Section 117 reads as follows: -
Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees. The learned Counsel argued that penalty under Section 117 can only be imposed when a person contravenes any provisions of the Act or abets any such provision or fails to comply the provisions of the said Act, which was duty to comply. Learned Counsel argued that no such default on part of the appellant has been pointed out in the Order-in-Original. He specifically highlights para 3.17 of the impugned order where Commissioner has observed as follows: -
3.17 As regards the noticee no. ii, M/s UPS Jetair Express Pvt. Ltd., in view of the above findings, I come to the conclusion that the inaction on their part in performing their obligations under the provisions of Courier Imports and Exports (Clearance) Regulations, 1998 and the Customs Act, 1962 which have rendered such goods liable to confiscation under Section 111 of the Customs Act, 1962, they have rendered themselves liable to penalty under Section 117 of the Customs Act. As regards the proposal for penal action against them under Section 112 and 114AA ibid, I find that the investigation could not unearth any concrete evidence regarding their knowledge of the mis-declaration of the goods under seizure and their connivance in the attempt for evasion of duty. Therefore, penal action under Section 117 of the Customs Act is found to be commensurate with their violation of the legal provisions.
3. Learned AR argued that they failed in their obligation under the provisions of Courier Import and Export (Clearance) Regulations, 1998 and the Customs Act, 1962 which have rendered the goods liable for confiscation under Section 111 of the Customs Act. The learned AR argued that there was a good reason for the appellant to be suspicious of the parcel in so much as the weight of the parcel was 22 kg but the value declared was less than Rs.3000/-. The freight charges for the consignment was Rs.25,000/- and these facts should have automatically made the appellant suspicious of the consignment. He argued that the appellant failed in his obligation prescribed under Regulation 13(a), 13(b) and 13(c). Such obligation of the authorized courier under Regulation 13 are as follows: -
13. Obligations of Authorized Courier.
An Authorized Courier shall-
(a) obtain an authorization, from each of the consignees of the import goods for whom such courier has imported such goods or consigners of such export goods which such courier proposes to export, to the effect that the Authorized Courier may act as agent of such consignee or consigner, as the case may be for clearance of such import or export goods by the proper officer; , provided that for import consignments having a declared value of ten thousand rupees or less, the authorization may be obtained at the time of delivery of the consignments to consignee
(b) advise his client to comply with the provisions of the Customs Act 1962 (52 of 1962) and rules and regulations made thereunder and in case of non-compliance thereof shall bring the matter to the notice of the Assistant Commissioner of Customs or Deputy Commissioner or Customs.
(c) exercise due diligence to ascertain the correctness and completeness of any information which he submits to the proper officer with reference to any work related to the clearance of import goods or of export goods;
4. I have considered the rival submissions. I find that the appellants are a Courier Company and in ordinary course of business they do not come to know about the actual discretion of the goods or actual value of the same. They are only aware of the details as disclosed by the clients. As argued by the learned AR, it is seen that no allegation in respect of failure to follow regulation 13(a) have been made in the notice and therefore, he cannot place any reliance on any fact relating to failure to observe the said obligations under said regulations. Furthermore, it is seen that no specific case of non-compliance, which was known to the appellant, was pointed out either in the notice or in the impugned order and therefore no allegation made for failure to observe the obligation under regulation 13(b) can be made. However, regulation 13(c) provides for a very wide scope. The appellants were required to exercise due diligence. The fact that the weight of consignment was 22 kg and the freight was Rs. 25,000/- but the declared value was less than Rs.3000/- should have raised suspicion. Therefore, it is felt that it was possible for the appellant to exercise due diligence in respect of the consignment. Considering that the appellants are in the courier business such consignments are indeed the outliners and needed closer scrutiny. However, considering the facts of the case, it is felt that the penalty imposed of Rs.1 lakh is excessive and penalty under Section is revised to Rs.10,000/- only. Appeal is partly allowed.
(Pronounced in Court on ..) (Raju) Member (Technical) Sinha 1 Appeal No. C/87613/13