Custom, Excise & Service Tax Tribunal
M/S Freight Connection India Pvt. Ltd vs Commissioner Of Customs (Export), ... on 9 June, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. C/85731/14 (Arising out of Order-in-Appeal No. 1158(ADJN-EXP)/2013/JNCH/EXP-244 dated 19.11.2013 passed by the Commissioner of Customs (Appeals), Mumbai-II). For approval and signature: Honble Shri Anil Choudhary, 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? ====================================================== M/s Freight Connection India Pvt. Ltd. Appellant Vs. Commissioner of Customs (Export), JNCH, Nhava Sheva Respondent Appearance: Ms. Subra Karmakar, Advocate for Appellant Shri S.J. Sahoo, AC (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 09.06.2015 Date of Decision: 09.06.2015 ORDER NO. Per: Shri Anil Choudhary
The appellant M/s Freight Connection India Pvt. Ltd. is in appeal against order of the Commissioner of Customs (Appeals) whereby penalty of Rs.5 lakhs was imposed under Sections 114(i), 114(iii) and 117 of the Customs Act, 1962.
2. The brief facts are that the Revenue received information that prohibited goods were attempted to be exported through JN Port, Nhava Sheva, in factory stuffed container no. IALU 2250490 under the guise of freely exportable goods. Shipping bill dated 12.2.2010 was filed by the CHA, M/s Franc Cargo Clearing o behalf of M/s Able Moulders, Aurangabad having IEC No. 0397083751. Based on the said intelligence, on 19.2.2010, it was found that the said container was loaded onboard the vessel MV Sima Sadaf, which sailed for Port Jebel Ali from Jawaharlal Nehru Port on 18.2.2010. The said container was called back and examined by the officers under panchanama on 4.3.2010. On investigation, the goods stuffed in the container was found to be red coloured wooden logs of different sizes. Shri Madhvanan A, Wild Life Inspector, Wild Life crimes Control Bureau was called upon for examination, who examined the said goods and expressed his expert opinion that they were Red Sanders wood logs of mixed quality of an international market value of around Rs.800/- per kg. The net weight of the goods was found to be 9915 kg and as per the rate of 800 per kg amounted to Rs.79,32,000/-. Red Sanders are prohibited goods under the Export Policy. Further, Red Sanders (Pterocarpus santalinus) was an endangered species and figures in Appendix II of the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES). The said consignment was seized vide panchanama dated 4.3.2010. Further investigation revealed that one more container was already exported under shipping bill filed under the IEC code of said Able Moulders to UAE. The details of the consignment being shipping bill No. 8089209 dated 28.1.2010, Export Invoice No. 16/09-10 dated 23.1.2010, Container No. BAXU 2608585 purported to be Printing Ink (GE Coldset Black) having FOB value of Rs.7,98,675/- . This shipping bill was filed by CHA M/s Ajay Overseas shipping. The goods already exported and delivered to the consignee which was coming under the category of past export. As per the Central Excise invoices related to the subject goods (based on which the checklist and the shipping bill number are generated), the subject goods were stuffed in the respective containers at the factory premises of M/s Organic Coating Ltd. at Mira Road, Dist. Thane, Maharashtra. Further, investigation revealed that M/s Able Moulders was not authorized to stuff containers at the premises of M/s Organic Coating Ltd. and the signatures and rubber stamp and seal of the Central Excise officers purported to have certified the stuffing of containers in question were forged and the bottle seal used to seal the said containers were not issued by them. Shri Deepak P. Doshi, General Manager of M/s Organic Coating Ltd. in his statement under Section 14 of the Central Excise Act, 1944 denied knowledge of any exporter by the name of M/s Able Moulders and shipping bill related to the present container No. IALU 2250490. Mr. Doshi stated that they are nothing to do with said goods under the said invoices and the said invoice was fake. Mr. Doshi in his letter addressed to the Supdt. of Central Excise having jurisdiction denied that they have nothing to do with the consignment in shipping bill dated 28.1.2010. Partner of Able Moulders, Shri Umesh V Dabri in his statement dated 28.5.2010 inter alia stated that IEC code have been issued to M/s Able Moulders by the DGFT, Aurangabad and subsequently another work area situated at Walung, Aurangabad was acquired by them. They were manufacturer exporter and their unit was registered with the Central Excise authority. They regularly exported plastic moulded products to various consignees in Dubai and Oman. It was further stated that there CHA was M/s Airol Cargo Services Pvt. Ltd. and all their consignments were stuffed at their factory situated at Aurangabad under stuffing permission granted by Jawaharlal Nehru Custom House, Nhava Sheva. When shown copies of shipping bill in question dated 12.2.2010 and 28.1.2010 and related export invoices, Shri Dabri stated that the shipments did not belong to them, the consignee mentioned on the said shipping bills and invoices was not amount their customers and was not known to them and further, the rubber stamp appearing on the invoices was different than the one used by them. He also denied having business relation with M/s Organic Coating Ltd. or his partner. In the present exports, the container was qualified as IAL India Ltd. and J.A. Maritime. As regards the past export, the container was carried away through container service provider M/s Welgrow Line India Pvt. Ltd.
2.1 The CHA firm in the present export relating to 22 containers in question was Franc Cargo Clearing Services having its office at Andheri (E), Mumbai and M/s Ajay Overseas Shipping, CBD Belapur, Navi Mumbai. As regards the enquiry with container provider/container line/operating agent providing the container no. IALU 2250490 in respect of present export of Able Moulders, the container provider was IAL India Ltd. and J.A. Maritime.
2.2 As regards the container of the past export being container No. BAXU 2608585 where export in the name of Able Moulders, the container was provided by M/s Welgrow Line India Pvt. Ltd. As per the Manager (Operation), Mr. Mahindra M Kambli, of M/s Welgrow Line India Pvt. Ltd. stated in his statement that he is working since 14 years as Manager Operation. It is further stated that M/s Welgro Line India Pvt. Ltd. was engaged in the business of Freight Forwarding and Logistic provider in the filed of export and import and they were registered as Multimodal Transport Operator. The container in question was provided by their company to one Shi Ramesh of M/s Globe Link Clearing and Forwarding. The said container owned and operated by M/s Freight Connection India Pvt. Ltd. was booked by them from the said container owners in their name and the delivery order for the said container issued by M/s Freight Connection India Pvt. Ltd. in their favour and the same was handed over to Shri Ramesh by Shri Mathew K Ketti, one of their Marketing Executive had also initially brought the order for booking the container from Shri Ramesh. Further, the name of shipper mentioned in Bill of Lading dated 29.1.2010 issued by the subsequent to shipment of the goods of M/s Able Moulders, this was only done after receipt of copy of the said shipping bill dated 28.1.2010 where exporter is given as Able Moulders and the shipment charges were collected in cash by Shri Mathew K Ketti from Shri Ramesh on behalf of their company against invoice dated 26.1.2010. It is further stated that M/s Global Link Clearing and Forwarding and Shri Ramesh were not known to them, no attempt was made by their company to verify whether Global Link Clearing and Forwarding or the said Shri Ramesh was exporter of the CHA or their authorized representative. It was only after two months when they came to know about enquiry being conducted by customs that the said firm was nonexistent nor Shri Ramesh could be traced. The said Manager M.M. Kambli admitted that there is mistake on part of the company to provide the said container to Shri Ramesh and his firm.
2.3 As regards the present appellant, Mr. Paul Gunsalves, Manager (Documentation) of the appellant stated that their company head is responsible for its activities. He further stated that he was worked with company since last 14 years and in capacity of Manager (Documentation) since the last 6 years, the appellant was agent of M/s Baylines (Dubai), who vide the container owners/operators/container line is engaged in the business of providing containers for the purpose of export to exporters, CHA and other booking parties. Generally, they received orders for containers from freight forwarders/logistic providers and CHA. As Manager (Documentation), he was in charge of all activities related to providing the containers, preparation of the container loading list and submission of the same to the Vessel Agent, preparation of the export manifest relating to shipment of containers, preparation of MBL etc. pertaining to business at JN Port. The said container No. BAXU 2608585 and the agent seal pertaining to export of M/s Able Moulders was provided by their company to M/s Welgrow Line India Pvt. Ltd. They did not know M/s Able Moulders, the exporter or M/s Ajay Overseals Shipping, the CHA. Further, they were not the persons/firms who placed the order with them for providing the said container, they did not enquire about the exporter or the authorized CHA who would use the container for stuffing the goods. Their marketing and booking staff concerned in booking and providing the container acted in conformity with the company policy decided by Shri Farhad Dholoo, Managing Director of their company.
2.4 Accordingly, a show-cause notice dated 22.12.2002 was issued calling upon among others, the present appellant alleging that it appears from the facts found in investigation that the appellant was not vigilant about the probable misuse of the container and seal owned/provided by them. They failed to take precaution to preclude the misuse of the container and seal by unscrupulous persons. The said Shri Ramesh and his accomplices the actual exporters were the end recipients of the said container and they used the said container to smuggle the subject goods. The said omission on part of the appellant herein resulted in use of the said container for the purpose of smuggling. Further, by providing of the said container and seal to persons who were neither the legal exporter nor the CHA, the appellant abetted M/s Welgrow Line India Pvt. Ltd., Shri Ramesh and the actual exporters to smuggle the prohibited goods. The said failure on part of the appellant and to take precaution amounts to abetting the actual exporter to export the prohibited goods which have rendered the goods liable to confiscation under Section 113(d) and the appellant have thereby rendered themselves liable to penalty under Section 114(i) and (iii) of the Customs Act. Further, the appellant by abetting M/s Welgro Line India Ltd and Shri Ramesh, who were neither the legal exporter nor the CHA, in contravening the provisions of Section 146(1) and regulation 3 (a) of the CHALR, 2004 have, in addition, rendered themselves liable to penalty under Section 117 of the Customs Act. On similar facts Mf. Farhad Dholoo , MD of the appellant was also show caused and held responsible for the companies and that he was also liable to penalty under Section 114 of the Act along with Shri Paul Gonsalves, Manager (Documentation) of the appellant. It has been further stated in para 26.1(v) of the show-cause notice that the actual exporters/owners of the goods disappeared from the scene as soon as investigation began and never came forward before the department to give their statement. Further, the exact nature of the goods could not be confirmed in absence of the goods and the fact that the actual exporters/owners of the goods were not available for questioning.
2.5 The said show-cause notice was adjudicated by the present Order-in-Original dated 16.11.2012 issued on 4.2.2013. It has been observed in para 83 of the order that the proceedings are kept in abeyance against Shri Ramesh, Shri Ganesh Poojari, Shri Vasant and other person/firm of company until they are apprehended since they are not traceable at this moment.
2.6 Further, as regards the present appellant the finding have been recorded in para 81 of the impugned order that the appellant failed to verify the credentials of their clients or even the existence of the firm intended by the client, conduct and criminal obligation on part of the appellant facilitated the actual exporter with the container of smuggling of the said goods and rendered the goods liable for confiscation under the provisions of the Customs Act. Accordingly, it appeared that the said act of providing the containers by the container owners to the actual exporters, persons who were neither the legal exporters no the CHA constitutes the abatement of the actual exporter, the smuggling of the prohibited goods thereby rendering the goods liable to confiscation under the provisions of Customs Act. Accordingly, it was held that present appellant alongwith other is also liable to penalty under Section 114(i) of the Customs Act and contravened the provisions of Section 146 read with regulation 3(a) of the CHALR, 2994 and have in addition rendered themselves liable to penalty under Section116 of the Customs Act. Accordingly, a penalty of Rs.5 lakhs have been imposed under Section 114(i) and (iii) of the Act.
2.7 Being aggrieved, the appellant is before this Tribunal.
3. The learned Counsel for the appellant submits that as the container was issued to them through another freight forwarder M/s Welgrow and accordingly it was the obligation of the said Welgro to verify credential of their clients before giving the container. It is normal rule of practice in the case of the appellant to verify the existence of the party when come through another freight forwarder. The learned Counsel urges that the whole case is based on assumption and presumption as neither the goods relating to past export in question was found and was confiscated nor the owners/exporters were found or apprehended by the Revenue Department. The learned Counsel further states that where the main accused are assailants have been apprehended and/or question on which also co-noticee, in case of aiding and abetting can be made against them more particularly on the basis of assumption and presumption.
3.1 The appellant further relies on the ruling of the Tribunal in the case of Mithran Vs. Commissioner of Customs,coimbatore 2009 (234) ELT 465 (Tri-Chennai), wherein vide final order dated 23.7.2008, the Division Bench of this Tribunal held that in view of the Commissioners finding with respect to the said Mithran and other, who was the CHA, the finding of abatement and offence committed by the exporter and Shri Antony Doss cannot be sustained. Learned Commissioner is yet to decide as to whether the exporter and Shri Antony Doss committed any offence whatsoever. He cannot find anybody to have abetted any offence until such offence is determined. Accordingly, it was held by the Tribunal that penalty imposed on the appellants is premature and accordingly the penalty was set aside. Accordingly, the learned Counsel prays for setting aside the penalty imposed on the appellant.
4. The learned DR supports the impugned order and further states that for imposition of penalty under Section 114 no mens rea is required. Further reliance was placed by the learned DR on the ruling of the Madras High Court in the case of Commissioner of Customs Vs. Bansal Industries 2007 (207) ELT 346 (Mad), wherein the question before the High Court was whether the element of mens rea is required for imposition of penalty under the Customs Act. The Hon'ble High Court relying on the ruling of the Apex Court in the case of Chairman, SEBI vs. Shriram mutual Fund 2006 (5) SCC 361 answered the question in favour of the Revenue and against the assessee thereby holding that the mens rea is not required for imposition of punishment under the Customs Act.
5. Having heard the rival contentions and considering the facts on record, I find that the present appellant have issued the container in question for past export through another freight forwarder. I further find that the whole case of the Revenue is based on assumption and presumption as neither the main accused or the exporter/owners of the goods have been found and brought to adjudication and in the absence of examination of the main exporter and further in absence of the purported prohibited goods not found and or confiscated, I hold that no case is made out for imposition of penalty against the appellant. Accordingly, the impugned order with extent to imposition of penalty on the present appellant is set aside. Thus, the appeal is allowed. The appellant shall be entitled to consequential relief, if any, in accordance with law.
(Dictated and pronounced in Court) (Anil Choudhary) Member (Judicial) Sinha 10