Custom, Excise & Service Tax Tribunal
M/S Cosco (I) Pvt. Ltd vs Commissioner Of Customs, New Custom ... on 13 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NOs. C/1021/12-MUM, C/1022/12-MUM [Arising out of Order-in- Appeal No. 458& 459/MCH/ADC/Gr. IV/NCH/2012 dtd. 6/8/2012 passed by the Commissioner of Customs (Appeals) Mumbai Zone I] For approval and signature: Honble Mr Ramesh Nair, 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 :
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?
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M/s Cosco (I) Pvt. Ltd.
Shri. Joy Francis
:
Appellants
VS
Commissioner of Customs, New Custom House, Mumbai.
:
Respondent
Appearance
Ms. Priyanka Patel, Advocate for the Appellants
Shri D.D. Joshi, Supdt. (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 13/10/2014
Date of decision: 13/10/2014
ORDER NO.
Two appeals are directed against order in appeal no. 458& 459/MCH/ADC/Gr. IV/NCH/2012 dtd. 6/8/2012 passed by the Commissioner of Customs (Appeals) Mumbai Zone I, wherein Ld. Commissioner (Appeals) upheld the imposition of penalties of Rs. 1Lakh on M/s. Cosco (India) Shipping Pvt. Ltd and Rs. 50,000/- on Shri Joy Francis, Dy. Manager M/s. Cosco (India) Shipping Pvt. Ltd. under section 112(a) of the Customs Act, 1962. The fact of the case is that on matter of import of Heavy Melting Scrap by M/s. Crescent Export shipping Agency, M/s. Cosco (India) Shipping Pvt filed IGM No. 017370 dated 24/12/2004. Mumbai Port Trust asked the importer to take delivery of consignment 376.23 MT Heavy Melting Scrap. Since the importer did not come forward to take delivery of the consignment it remained un-cleared. The importer vide letter dated 23/05/2006 informed Mumbai Port Trust that the said consignment does not belong to them. Thus, the consignment was put up for auction and the same was purchased by M/s. Pranav Steel Corporation, Mumbai in auction from Mumbai Port Trust. The consignment was examined by Shed Appraiser, Mumbai Port Trust and Police Authorities on 26/3/2007 and as per Joint examination report, no arms and ammunitions and explosives were found. The Port Trust had filed bills of entry for the clearance of the said goods. Meanwhile, Police Inspector, Wadala Police Station on 19/7/2007 written a letter suspecting the container contain defused shells and other live ammunition therefore the sale of the goods to M/s. Pranav Steel Corporation, Mumbai cancelled on 27/9/2007. The Police officials along with Bomb Detection and Disposal Squad, Mumbai Port Trust staff and appraising staff examined the above said consignment on 15/12/2007 and detected some live shells spent cartridges and spent hand grenades with the help of a sniffer dogs and SRTVD-8 equipment. The forensic lab vide their report 31/3/2008 detected the presence of prohibited material such as Nitrite radical, Tri nitrotoluene, Tetryl and RDX. Thereafter, show cause notice dated 10/8/2010 was issued wherein penalties were proposed on M/s. Cosco (India) Shipping Pvt. Ltd and Shri Joy Francis, Dy. Manager M/s. Cosco (India) Shipping Pvt. Ltd. under section 112(a)(b) of Customs Act, 1962 alleging that shipping agent by shipping such dangerous goods to India not followed instruction of Central Board of Excise and Custom circular No. 56/2004 dated 18-10-2004, which had laid down in para 7 that failure to observe this precaution for import of Heavy Metal Scrap would invite panel action against shipping line. It was also contended that M/s. Cosco (India) Shipping Pvt. Kept in dark the law enforcing agency by not informing them about the arrival of impugned consignment to avoid action and thus by their act of omission and commission for rendered them liable for panel action under section 112(a) of Customs Act, 1962. As regard the charges on Shri Joy Francis in the show cause notice alleged that he shown gross negligence in handling such dangerous cargo and aided and abetted the import of impugned goods. In the adjudication order dated 13/1/2011 penalties were imposed upon both appellants under section 112(a) of Customs Act, 1962. Aggrieved of the said order, both the appellants filed appeal before the Commissioner (appeals) of Customs. The Ld. Commissioner (Appeals) upheld the penalties specifically on the findings that appellants have violated the instruction laid down in Circular 56/2004. Hence, the appellant before me.
2. Ms Priyanka Patel, Ld Counsel for the appellant submits that there is no mistake on their part as appellants have declared the correct description in IGM on the basis of import documents. She further submits that appellant submitted inspection report which was issued by M/s. Moody International Certification(Tehran). She fairly admitted that said agency is not specified agency in the Handbook of Procedure. It was a confusion in the mind of the appellant that certificate issued by name of the agency, M/s Moody International Certification(Tehran) and specified agency name is M/s Moody International Certification(India) Pvt Ldt. Due to this confusion unintentional mistake has occurred, since no malafide is proved on the part of the appellant.
3. Shri D. D. Joshi, Ld. Superintendent (A.R.) on behalf of Revenue reiterated the findings of the lower appellate authority. He further submits that in the circular No. 56/2004 cus dated 18/10/2004 the precaution to be taken by the shipping agency has been clearly spelt out and for non compliance would attract panel action. He submits that shipping line is duty bound to ensure the inspection of the import consignment of Heavy Melting Scrap which appellant have failed to observe. He also submits that as against consignments valued Rs. 42 lakhs approximately, penalty imposed is only to the extent Rs 1 lakh and Rs. 50,000/- on the both the appellants. He refers to section 30(2) of the Customs Act, 1962 regarding the responsibility of the shipping agent to provide correct and true information of import consignments.
4. I have carefully considered the submissions made by both the sides.
5. In the facts and circumstances of the case as discussed above, there is no dispute that appellant have not verified the correctness of the inspection report which was supposed to be issued by M/s Moody International Certification(India), which is specified agency as provided under the Handbook of Procedure, 2009. However, inspection report issued by the M/s Moody International Certification Tehran, which is not specified agency for carrying out pre-inspection of consignment of Heavy Melting scrap. On going through circular of 56/2004, it can be seen that the whole procedure and precautions was specified particularly in respect of melting scrap which has specific objective to avoid the casualties due to explosion of the explosive contained in the heavy melting scrap. The circular was issued after serious accident took place, wherein due to explosion 10 persons were died. So it is very obvious that precautions prescribed with the sole objective of saving of human lives. Therefore, heavy responsibility have been casted on the agency involved in importation and clearance of consignments of heavy melting scrap. In the present case the submission of the appellant that merely because of similar name of the pre-inspection agency, mistake has occurred on their part therefore there is no malafide on their part can not accepted. In para 7 of the circular 18/102004 it is categorical provided as -
It will also be the responsibility of the shipping line to henceforth ensure that every consignment of metal scrap in un- shredded, compressed or loose for is accompanied by such a pre-shipment inspection certificate before it is loaded on the ship. Failure to observe this precaution would invite penal action for abetment regarding irregular import of metal scrap.
From the above specific para of the circular, it is very clear that the shipping line is duty bound to ensure that every consignment of metal scrap in shredded, compressed or loose form is accompanied by such a pre-shipment inspection certificate before it is loaded on the ship and failure of the such compliance, panel action was proposed.
6. In view of this, the mensrea is not required, in failure of such compliance. I am of the view that irrespective of any reason if directions provided in the circular is not complied with, whether intentional or unintentional, shipping line is bound to face the consequences. As regard penalty on Shri. Joy Francis, since he is directly involved in documentation as authorized by the shipping line, he is also equally responsible for the lapses made by his employer i.e. M/s. Cosco (I) Pvt Ltd. In view of the above discussion, I am of the considered view that the penalties were correctly and legally imposed upon both the appellants, therefore both the appeals are dismissed.
(Dictated in court) Ramesh Nair Member (Judicial) sk 7