Custom, Excise & Service Tax Tribunal
Ags Transact Technologies Ltd vs Nhava Sheva on 6 June, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
MUMBAI
REGIONAL BENCH - COURT NO. I
CUSTOMS APPEAL No. 87233 of 2024
(Arising out of Order-in-Original No. 137/2024-25/COMMR/SCMTR/NS-G/CAC/JNCH dated
06.09.2024 passed by Commissioner of Customs (General), JNCH, Nhava Sheva.)
Aiyer Shipping Agency Private Limited .....Appellants
1201/1202 Meraki Areana, Opposite R.K. Studio
Sion Trombay Road, Chembur
Mumbai - 400 071.
VERSUS
Commissioner of Customs (General) .....Respondent
Jawaharlal Nehru Customs House (JNCH) Nhava Sheva-Customs General Commissionerate Nhava Sheva, District Raigad Maharashtra - 400 707.
APPEARANCE:
Shri Rafiq Mohammed, Advocate for the Appellants Shri Rajiv Ranjan, Authorised Representative for the Respondent CORAM:
HON'BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON'BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) FINAL ORDER NO. A/85866/2025 Date of Hearing: 07.02.2025 Date of Decision: 06.06.2025 PER : M.M. PARTHIBAN This appeal has been filed by M/s Aiyer Shipping Agency Private Limited, Mumbai (herein after, referred to as 'the appellants'), assailing Order-in-Original No. 137/2024-25/COMMR/SCMTR/NS-G/CAC/JNCH dated 06.09.2024 (herein after, referred to as 'the impugned order') passed by Commissioner of Customs (General), JNCH, Nhava Sheva Customs General Commissionerate, Nhava Sheva.
2.1 Brief facts of the case, leading to this appeal, are summarised below:
2.2 The appellant herein, M/s Aiyer Shipping Agency Private Limited, Mumbai, is a company registered as an 'Authorised Sea Agent' (ASA) under Sea Cargo Manifest and Transshipment Regulations, 2018 (referred to as SCMTR, 2018 for short) in the jurisdiction of Commissionerate of Customs (General), JNCH, Nhava Sheva. There were two Shipping Bills (S/Bs) viz., 2 C/87233/2024 S/B Nos. 7304634 and 7304635 both dated 07.01.2022 filed for export of 297.541 MTs of 'SHG Jumbo Zinc (minimum of 99.995%) in 12 containers by the exporter M/s Hindustan Zinc Limited through their customs broker (CB) M/s Western Carriers (India) Limited. Since, the exporter was exporting the goods under self-sealing procedure with electronic/e-seal verification, the containers arrived at the JNCH, Nhava Sheva port under Direct Port Entry (DPE) procedure at Jasai holding yard on 09.01.2022 (Sunday) and subsequently the containers were moved inside the JNCH port terminals on the same day for export through the vessel 'MV Thorsky'.
In respect of the above exports, the customs broker was able to present the assessed S/Bs for obtaining Let Export Order (LEO) only on 10.01.2022, and as the vessel was scheduled to depart/sail on 09.01.2022, the LEO copy of S/Bs could not be presented to the master of the vessel before it was leaving the port of export, and while processing the S/Bs for allowing drawback on exports, the error message of "LEO date greater than sailing date" appeared in the customs EDI system. Therefore, the appellants had taken up the matter of rectifying the EGM error, by filing request letter to the proper officer of customs on the basis of letter given by the shipping company dated 12.05.2022.
2.3 The matter was investigated by the departmental authorities and on the basis of facts and evidences available on record, and order-in-original dated 14.03.2024 was passed by the learned Commissioner of Customs ordering for suspension the operations of M/s Aiyer Shipping Agency Pvt. Ltd. from 01.04.2024 to 15.04.2024 and imposed penalty, redemption fine for violations of section 33, 34, 39, 40 & 41 of the Customs Act, 1962 and also imposed penalty under regulation 11 of the SCMTR, 2018, for failure to comply with provisions of regulations 5 & 10(1)(m) of the SCMTR, 2018. In this regard, the appellants have filed a Writ Petition No.4816 of 2024 before the Hon'ble High Court of Bombay on the ground that no opportunity of hearing was given to them before a drastic order affecting their livelihood was passed. On hearing the said case, the Hon'ble High Court vide its judgement dated 28.03.2024 had quashed the said order dated 14.03.2024 and directed the customs authorities to issue show cause notice to the appellants and after giving a reasonable opportunity for hearing to them, allowed the Commissioner to pass an order in accordance with the law. Consequent to this, the order dated 14.03.2024 was withdrawn vide office letter dated 29.03.2024 and a Show Cause Notice (SCN) dated 08.04.2024 was issued to the appellants.
3C/87233/2024 2.4 On the basis of inquiry proceedings initiated under SCMTR, 2018; inquiry report dated 24.06.2024, the learned Commissioner of Customs had passed the impugned order dated 06.09.2024 for suspending the operations of the appellants for a period from 23.09.2024 to 06.10.2024. Besides the above, the said order also imposed redemption fine of Rs.50,00,000/- under Section 125 of the Customs Act, 1962, consequent to confiscation of impugned export goods under sub-sections (d), (f) & (g) of Section 113 ibid and also imposed penalties of Rs.20,00,000/- under Section 114(iii) ibid and Rs.50,000/- under Regulation 13 of SCMTR, 2018 on the appellants for allowing regularization of two S/Bs dated 07.01.2022. Feeling aggrieved with the impugned order, the appellants have filed this appeal before the Tribunal.
3.1 Learned Advocate submitted that the decision to suspend the operations of the appellants is ultra vires as they are not the 'Authorised Sea Carrier' who is required to file the Export General Manifest (EGM) and hence the action taken in the impugned order under Regulation 11 ibid for alleged violations of regulations 5, 10(1)(m) ibid is improper. Since the appellants are not the person in charge of the vessel carrying the export goods, learned Advocate pleaded that the appellants are not liable for imposition of penalty alleging violation under sub-sections (d), (f) & (g) of Section 113 ibid, Section 114(iii) ibid.
3.2 Further, learned Advocate also submitted that the SCMTR, 2018 has not yet been implemented by the Central Board of Indirect Taxes & Customs (CBIC); even though these regulations were introduced in the year 2018, as its implementation has been extended by way of transitional provisions under regulation 15 (2) of SCMTR, 2018; hence, he stated that the appellants cannot be penalised for violation of the said regulations.
3.3 Furthermore, learned Advocate stated that appellants have acted only as an agent of the Non-Vessel Operating Common Carrier (NVOCC) and issued bill of lading to the exporter. Hence the impugned order is incorrect in holding them as an agent of an NVOCC liable for violation of non-filing of EGM and for exporting the goods without a valid Let Export Order of shipping bill under sections 40, 41 ibid. Learned Advocate by relying on the order in the case of HK Shipping Services Pvt. Ltd. Vs. Commissioner of Central Excise & Customs, Rajkot - 2000 (120) E.L.T. 676 (Tri.-Bom.) had pleaded that the appellants are not agent of the conveyance, and therefore the conclusion arrived for imposition of penalty 4 C/87233/2024 on the appellants is not sustainable. Hence, he stated that the impugned order is liable to be set aside.
4. On the other hand, learned Authorised Representative for Revenue reiterated the findings recorded by the Commissioner in the impugned order,
5. Heard both sides and perused the records of the case.
6. The issue involved herein is to decide the following:
(i) Whether the appellants have violated the provisions of Regulations 5, 10(1)(m) of SCMTR, 2018 and Sections 34, 39, 40, 41 of the Customs Act, 1962, or not?
(ii) Consequent to the above determination of the issues, whether the appellants are liable for suspension of their operations under Regulation 11 of SCMTR, 2018 or not?
(iii) Whether the impugned goods covered under two shipping bills for which the LEO copy of shipping bill was not submitted, is liable for confiscation under sub-sections (d), (f) and (g) of Section 113 ibid and whether appellants are liable for penalty under Sections 114(iii) of the Customs Act, 1962 and Regulation 13 of SCMTR, 2018.
7.1 The specific sub-regulations which were alleged to have been violated by the appellants are Regulations 5 and 10(1)(m) of SCMTR, 2018, and hence there are two distinct charges framed against the appellants. We find that the Regulation 10 of SCMTR, 2018, provide for the obligations that a authorised carrier in carrying the import or export goods. Regulation 5 ibid provide for delivery of documents specified therein. Further, Regulations 11, 12, 13 ibid provide the procedure for initiating suspension action and for imposition of penalty. These are as follows:
Sea Cargo Manifest and Transhipment Regulations, 2018 "5. Delivery of a Departure Manifest. -- (1) An authorised sea carrier carrying imported goods, export goods, coastal goods or goods meant for foreign transit or foreign transhipment, shall before the departure of the vessel from the port, deliver the departure manifest to the proper officer electronically :
Provided that where it is not possible to deliver the departure manifest electronically, then the manifest shall be delivered manually in duplicate with the approval of Commissioner of Customs before the departure of the vessel.
(2) The departure manifest shall consist of, -
(a) a general declaration in Form-III;
(b) a vessel's stores list in Form-IV;5
C/87233/2024
(c) a list of private property in the possession of the Master and crew, in Form-V;
(d) a cargo declaration :
(i) for vessel departing from an Indian port to a Foreign port in Form- VIIA; or
(ii) for vessel departing from an Indian Port to another Indian port directly or through designated foreign route in Form-VIIB;
(e) any other declaration which, under the provisions of the Customs Act or any other Act for the time being in force is required to be delivered to the proper officer on arrival of the vessel.
10. Responsibilities of the authorised carrier under these regulations. -- (1) An authorised carrier shall-
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(m) abide by all the provisions of the Act and the rules, regulations, notifications and orders issued thereunder;
(2) The authorised carrier shall not sublet or sub-contract or outsource functions permitted or required to be carried out by him to any other person.
11. Suspension of operations or revocation of registration of an authorised carrier. -- (1) The jurisdictional Commissioner of Customs may revoke the registration of the authorised carrier, for failure to comply with any provisions of the regulations.
(2) The Commissioner of Customs of any customs station on reasonable belief that operations of such authorised carrier is detrimental to the interest of revenue, may suspend their operation in his jurisdiction by an order stating the grounds of suspension.
(3) The Commissioner of Customs shall, within fifteen days from the date of such suspension order, shall give an opportunity of hearing to the person and pass such order within fifteen days from the date of the said hearing, as he deems fit, either revoking the suspension or continuing it for a further period not exceeding ninety days from the date of suspension, as the case may be :
Provided that where the suspension against the authorised carrier has been continued, the Commissioner of Customs concerned shall intimate to the jurisdictional Commissioner of Customs, about the order within fifteen days from the date of issue of such order.
12. Procedure for revocation of registration. -- (1) The jurisdictional Commissioner of Customs shall issue a notice in writing to the authorised carrier stating the grounds on which it is proposed to revoke the registration and requiring the said person to submit within such time as may be specified in the notice not being less than thirty days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, nominated by him, a written statement of defence and also to specify in the said statement whether he desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(2) On receipt of the written statement from the authorised carrier, or where no such statement has been received within the time-limit specified in the notice, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, may inquire into the grounds of the revocation as stated in the notice.
(3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, shall in the course of inquiry, consider such documentary evidence and take such oral evidence as required for inquiry and he may also put any question to any person tendering evidence, for or against 6 C/87233/2024 the authorised carrier, for the purpose of ascertaining the correct position.
(4) The authorised carrier shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.
(5) Deputy Commissioner of Customs or Assistant Commissioner of Customs, shall prepare a report of the inquiry recording his findings after the conclusion of the inquiry.
(6) The jurisdictional Commissioner of Customs shall provide to the authorised carrier a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require the authorised carrier to submit within the specified period not being less than thirty days any submission against the findings of the Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(7) The jurisdictional Commissioner of Customs shall, after considering the report of the inquiry, and the submission thereon, if any, made by the authorised carrier, pass such orders as he deems fit.
13. Imposition of Penalty. -- An authorised carrier who contravenes any provision of these regulations shall be liable to a penalty which may extend to rupees fifty thousand."
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15. Transitional provisions.-(1)Notwithstanding anything contained in regulations 4, 5 and 7, the authorised carrier may deliver the cargo declaration in Form-VIA or Form-VIB and Form-VIIA or Form-VIIB or arrival and departure manifest in Form-VIII or Form-VIIIA, for the period of forty-five days from the date of commencement of these regulations (2) Notwithstanding anything contained in these regulations, the authorised sea carrier shall continue to deliver the cargo declaration in Form III of the Import Manifest (Vessels) Regulations, 1971 and Form I of the Export Manifest (Vessels) Regulations, 1976,in the manner as was applicable before the commencement of these regulations, till 1st November, 2019."
7.2 On perusal of Notification No.38/2018-Customs (N.T.) dated 11.05.2018 vide which the Sea Cargo Manifest and Transhipment Regulations (SCMTR), 2018, were notified by the Government, it transpires that SCMTR intends to bring about transparency, predictability of movement, advance collection of information for expeditious clearance of vessels in import/export of goods. The said SCMTR, 2018 supersedes the earlier regulations viz. Import Manifest (Vessels) Regulations, 1971 and Export Manifest (Vessels) Regulation, 1976. The new Regulations stipulate for advance notice by authorized carriers for goods arriving in or being exported out of India through gateway seaports and further movement between Customs stations. They stipulate the obligations, roles and responsibilities for the various stakeholders involved in movement of 7 C/87233/2024 imported/export goods. While introducing these new Regulations, the CBIC had consulted various stakeholders, and based on the feedback received several changes were incorporated and the said regulations was made effective from 01.08.2019 with transitional provisions under Regulation 15 till 30.09.2020. Relevant paras of Circular 12/2021-Cus. is given below:
8C/87233/2024 7.3 Taking into account of disruptions caused due to Covid-19 Pandemic and non-readiness of the stakeholders, CBIC had issued Notification No.94/2020-Customs (N.T.) dated 30.09.2020, vide which the transitional provisions under Regulation 15(2) were further extended from 01.10.2020 till 31.03.2021 to enable submission of manifests under erstwhile regulations. However, as per Regulation 15(1), mandatory filing of different declarations in new format in a phased manner is provided for as per the annexure-A to this circular.
7.4 Furthermore, different timelines are prescribed by the Government so that trade has sufficient time to comply with the new regulations in a phased manner. It is also seen that vide Regulation 15(2), the mandatory compliance requirements for submissions of declarations and manifests under the said regulations was applied as per the dates prescribed for different customs ports as mentioned therein. The extract of the said Notification No.57/2024-Customs (N.T.) dated 31.08.2024 is given below.
On careful perusal of these details, it transpires that in respect of JNCH Customs of Nhava Sheva port, the transitional provisions were in vogue till 30.11.2024, as per sr. no. 6 of the aforesaid notification.
7.5 On perusal of the recent Circular No. 10/2025-Customs dated 28.03.2025 issued by CBIC, it clearly transpires that the Central Government had intended to bring in a new regulations governing the electronic declaration, processing of all customs work relating to arrival and departure of vessel/conveyances in the form of SCMTR, 2018, with a purpose of achieving the twin objective of reducing the dwell time in customs process and transaction cost in international trade. However, due to various technical difficulties and the lack of preparedness of the stake holders in participating and filing of details under SCMTR, 2018, implementation of such regulations were kept on extended for more than five years until 31.05.2025, with transitional provisions taking care of filing of essential details as per the previous regulations in force.
9C/87233/2024 10 C/87233/2024 11 C/87233/2024 7.6 Hence, under such circumstances where CBIC had specifically directed the Chief Commissioners/Commissioners of Customs to sensitise the field officers not to take penal action in the interim period, we find that the impugned order invoking the provisions of such SCMTR, which is yet to be implemented on the relevant date of two S/Bs concerning the present case i.e., both dated 07.01.2022, for imposition of suspension of the operation of the appellants and imposition of penalties on the appellants does not stand for legal scrutiny.
7.7 Therefore, it could be concluded that all the requirements for declaration of details including the alleged requirements under Regulation 5 ibid in the case of appellants in respect of JNCH Nhava Sheva port would be operational only when the entire SCMTR, 2018 was made fully operations for the specific port of import/export. It is an undisputed fact that the impugned two S/Bs concerning the present case are both dated 07.01.2022, for which the SCMTR, 2008 does not apply on that date as the said regulations was made operational for JNCH, Nhava Sheva port after the expiry of transitional provisions upto 30.11.2024 i.e., w.e.f. from 01.12.2024. Therefore, we are of the considered view, that the impugned order holding that the Regulations 5 and 10(1)(m) ibid have been violated by the appellants does not stand the scrutiny of law.
8.1 In order to address the issues concerning alleged violation of Sections 34, 39 ,40, 41, 113(d), 113(f) and 113(g) of Customs Act, 1962 and for imposition of penalty under Section 114(iii), we would like to refer the relevant legal provisions contained in Customs Act, 1962.
Customs Act, 1962 "Goods not to be unloaded or loaded except under supervision of customs officer.
Section 34. Imported goods shall not be unloaded from, and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer :
Provided that the Board may, by notification in the Official Gazette, give general permission and the proper officer may in any particular case give special permission, for any goods or class of goods to be unloaded or loaded without the supervision of the proper officer.
Export goods not to be loaded on vessel until entry-outwards granted.
Section 39. The master of a vessel shall not permit the loading of any export goods, other than baggage and mail bags, until an order has been given by the proper officer granting entry-outwards to such vessel.12
C/87233/2024 Export goods not to be loaded unless duly passed by proper officer.
Section 40. The person-in-charge of a conveyance shall not permit the loading at a customs station--
(a) of export goods, other than baggage and mail bags, unless a shipping bill or bill of export or a bill of transhipment, as the case may be, duly passed by the proper officer, has been handed over to him by the exporter;
(b) of baggage and mail bags, unless their export has been duly permitted by the proper officer.
Delivery of departure manifest or export manifest or export report Section 41. (1) The person-in-charge of a conveyance carrying export goods or imported goods or any other person as may be specified by the Central Government, by notification, shall, before departure of the conveyance from a customs station, deliver to the proper officer in the case of a vessel or aircraft, a departure manifest or an export manifest by presenting electronically, and in the case of a vehicle, an export report, in such form and manner as may be prescribed and in case, such person- in-charge or other person fails to deliver the departure manifest or export manifest or the export report or any part thereof within such time, and the proper officer is satisfied that there is no sufficient cause for such delay, such person-in-charge or other person shall be liable to pay penalty not exceeding fifty thousand rupees.
Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to deliver the departure manifest or export manifest by presenting electronically, allow the same to be delivered in any other manner.
(2) The person delivering the departure manifest or export manifest or export report shall at the foot thereof make and subscribe to a declaration as to the truth of its contents.
(3) If the proper officer is satisfied that the departure manifest or export manifest or export report is in any way incorrect or incomplete and that there was no fraudulent intention, he may permit such manifest or report to be amended or supplemented.
Confiscation of goods attempted to be improperly exported, etc. Section 113. The following export goods shall be liable to confiscation :--
(d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;
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(f) any goods which are loaded or attempted to be loaded in contravention of the provisions of section 33 or section 34;
(g) any goods loaded or attempted to be loaded on any conveyance, or water-borne, or attempted to be water-borne for being loaded on any 13 C/87233/2024 vessel, the eventual destination of which is a place outside India, without the permission of the proper officer;
Penalty for attempt to export goods improperly, etc. Section 114. Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable,--
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act], whichever is the greater;
(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher:
Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the penalty so determined
(iii) in the case of any other goods, to a penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under this Act, whichever is the greater."
8.2 In terms of the legal provisions of Sections 34 and 39 ibid, export goods shall not be loaded on to a vessel except under the supervision of proper officer of Customs and the master of the vessel shall not permit loading of any export goods, until an order has been granted for entry outwards for such vessel by the proper officer of customs. It is not the case of Revenue, that the vessel 'MV Thorsky' which sailed out from JNCH Nhava Sheva port on 09.01.2022 was not given 'Entry Outwards' by Customs authorities and the loading of the containers/export goods was not supervised by the proper officer of Customs. The only allegation levelled in the present case of two S/Bs is that Let Export Order copy was not provided to the shipping line/master of the vessel on 09.01.2022 when it sailed duly obtaining the Entry Outwards by the Customs authorities, after all the export goods have been loaded under the supervision of proper officer of Customs. Therefore, there is no case for violation of the provisions of Section 34 and 39 of the Customs Act, 1962 in the present case.
8.3 It also transpires from plain reading of Section 41 ibid that the requirement of submission of Export General Manifest (EGM) before the departure of the vessel is primary responsibility of the person in-charge of the vessel or his agent, as may be specified through notification issued by the Central Government. Therefore, the shipping lines, NVOCC or shipping 14 C/87233/2024 agent or such other authorised persons alone are responsible for filing the EGM within the prescribed time. The facts of the case also indicate that it is not the case of Revenue, that the EGM for vessel 'MV Thorsky' in respect of its voyage out of India on 09.01.2022 has not been filed. Therefore, there is no case of violation of Section 41 ibid, in the present case.
8.4 In respect of the requirements under Section 40 ibid, the person-in- charge of a vessel shall not permit the loading of export goods, unless the shipping bill covering such export goods have been duly passed by the proper officer of customs and such S/B has been handed over to him by the exporter. Plain reading of the legal provision under Section 40 ibid clearly stipulate that the requirement of submission of S/B with the permission of the Customs officer permitting export i.e., 'Let Export Order' (LEO) rests with the exporter. There is no specific role of shipping agent in fulfilling the requirement under Section 40 ibid, as opposed to the requirement of Section 41 ibid, where it is provided that besides the person-in-charge of a conveyance carrying export goods, any other person who may be specified by the Central Government, by notification is also responsible for compliance of such legal provisions. Therefore, we are of the considered view that the appellants cannot be held liable for any failure with respect to compliance with the requirement of Section 40 ibid.
8.5 Further, we find that the Commissioner of Customs (General), JNCH and other Commissioner of Customs, NS-II and NS-IV of JNCH have issued various instructions, standing orders being trade facilitation measures for expeditious customs clearance of cargo. These are contained in Public Notices No. 03/2017 dated 09.01.2017; No.138/2020 dated 23.10.2020; No.13/2017 dated 31.01.2017 & No.47/2017 dated 31.03.2017. Further, Public Notices No. 163/2016 dated 01.12.2016 & No. 174/2016 dated 15.12.2016 provide for Standard Operating Procedure consequent to commencement of "Document Processing Area" in the Parking Plaza and Gate Automation for Export & Import through NSCIT/NSIGT, GTI & JNPCT, in order to provide a single point documentation processing in case of exports. In the Public Notice No. 03/2017 dated 09.01.2017, at paragraph 5(b) it has been clarified that "it is the responsibility of the Port Terminal Operator to ensure that once any container has entered the Parking Plaza within the prescribed time limit, the vessel is not missed. In this regard, if required, they may issue advisory prescribing the timelines so that if any container has entered the Parking Plaza within those time lines, its loading 15 C/87233/2024 on the vessel has to be ensured subject to compliance of Customs Act or any other law." Further, in Public Notice No.13/2017 dated 31.01.2017 it has also been provided that in case of any delay in processing of S/Bs due to system issues, in order to ensure that the export goods does not miss the vessel in which it is to be sailed out of the country, manual clearances/ manual Let Export Order (LEO) has been allowed on case to case basis. On careful perusal of the aforesaid instructions of the Customs authorities, it clearly transpires that customs clearance of exports, including grant of LEO has been facilitated to ensure that the export goods does not miss the vessel and the exporter(s) are put to loss or delay in export, on account of the inefficiency or unexpected problems that may arise in customs clearance of exports.
8.6 Furthermore, the Customs EDI system provides for processing of Shipping Bill under the following processes viz.,
(i) S/B filing by the exporter or his agent/customs broker;
(ii) Goods registration, enabling presentation of the export goods along with documents at CFS or other permitted places;
(iii) Examination of the export goods, for determining its permissibility for export in terms of customs and other applicable laws;
(iv) Filing of EGM by shipping lines; and
(v) Processing and Release of drawback.
As in the present case, the export consignments of M/s Hindustan Zinc Limited were extended by the Customs authorities with Direct Port Entry facility and facility of e-sealing permission, and the export goods were being transported by rail from Kota to BMCT Terminal, Nhava Sheva. This had ensured that the e-seal verification was completed by customs appraisers before the containers were allowed into the terminal. In case the goods are brought to any of the CFS or other area earmarked for exports, then for examination of the goods at the CFS/shed, the CHA/CB or the exporter has to present the Check List along with all original documents such as Invoice, Packing List etc. to the Inspector/EO. The Inspector/EO will feed the examination report and forward the document to Superintendent for issue of "Let Export Order' (LEO). The Inspector/EO has the option to raise query, seek guidance on examination, verify the documents attached etc. Hence, it could be seen that the process of issue "Let Export Order" for a S/B is the function of the proper officer of Customs, and in case of any undue delay in issue of LEO, the exporter or his agent 16 C/87233/2024 cannot be found fault and they cannot be allowed to loose the loading of export goods into the vessel, though which the export goods were planned to be exported. Essentially, to take care of such eventualities various error messages are generated in Customs EDI system, to ensure that these are rectified on examination of the merits of each case. Further, the purpose of generating various error messages is to ensure that the data captured with respect to exports/imports are properly validated and the Customs authorities ensure that all legal requirements have been met in the process. Some of the error messages relating to exports are as follows:
No. Code Error message SACHE18 B S/B already filed in another EGM No. SACHE18 G Sailing Report not entered SACHE18 L LEO date is greater than sail date SACHE18 R Record does not exists in C_sb_rotn for that EGM SACHE18 P Packets mentioned in EGM does not match with C_SB SACHE18 N Total No. of container does not match with C_Container SACHE18 W Total Qty in EGM does not match with gross Wt. C_SB SACHE18 J Nature of cargo in EGM does not match with C_SB
8.7 In view of the above discussion and analysis of the legal provisions which are alleged to have been violated in the present case, and on the basis of various instructions issued in the form of Public Notice by JNCH customs authorities, we are of the view that the appellants have not violated any of the legal provisions in not submitting the copy of LEO copy of the S/B to the person in-charge of the vessel, before the sailing of the vessel or EGM, particularly when the appellants have filed the request for rectification of such error.
9. On perusal of the legal provisions of Section 113 ibid, it transpires that essential ingredients of sub-section (d), (f), (g) such as attempt to export contrary to any prohibition; loading of goods in violation of Section 33, 34; loading of export goods in a vessel without obtaining permission of proper office of customs is not present in this case. No evidence for any allegation has been made to this effect, except that the LEO copy of S/Bs have not been given before the sailing of the vessel. Therefore, we are of the considered view that the alleged violation of sub-sections (d), (f), (g) to Section 113 ibid does not stand the legal scrutiny. Consequently, imposition of penalty under Section 114(iii) ibid also does not sustain.
10. In view of the foregoing discussions, we do not find any merits in the impugned order passed by the learned Commissioner of Customs (General), JNCH, Nhava Sheva in suspension of the operation of the appellants; for confiscation of export goods and consequent imposition of 17 C/87233/2024 redemption fine and for imposition of penalties, inasmuch as there is no violation of regulations 5, 10(1)(m) of SCMTR, 2018 and legal provisions under Sections 34, 39, 40, 41, 113(d), 113(f), 113(g) ibid, and the findings in the impugned order is contrary to the facts on record.
11. Therefore, by setting aside the impugned order dated 06.09.2024, we allow the appeal in favour of the appellants.
(Order pronounced in open court on 06.06.2025) (S.K. Mohanty) Member (Judicial) (M.M. Parthiban) Member (Technical) Sinha