Custom, Excise & Service Tax Tribunal
Shri Shrikanta Adhikari vs Kolkata(Port) on 4 July, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No.76206 of 2016
(Arising out of Order-in-Original No.KOL/CUS/COMMISSIONER/PORT/33/2016 dated
08.04.2016 passed by Commissioner of Customs (Port), Kolkata.)
Shri Srikanta Adhikary
(67, Nivedita Sarani, Bally, Durgapur, Howrah-711205.)
...Appellant
VERSUS
Commissioner of Customs (Port), Kolkata
.....Respondent
(15/1, Strand Road, Custom House, Kolkata-700001.) APPEARANCE Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri S.Debnath, Authorized Representative for the Revenue CORAM: HON'BLE SHRI R. MURALIDHAR, MEMBER(JUDICIAL) HON'BLE SHRI RAJEEV TANDON, MEMBER(TECHNICAL) FINAL ORDER NO. 76224/2024 DATE OF HEARING : 24.06.2024 DATE OF DECISION : 04.07.2024 Per : RAJEEV TANDON :
The appellant who alleges to work as a Commission Agent for the Custom House Agents (CHA)/Customs Brokers (CB) and procures import-export business for the CHA/CB firms is aggrieved by the Order-in-Original dated 08.04.2016 passed by the Ld. Commissioner of Customs, Kolkata, whereby the appellant has been subjected to a penalty of Rs.50,00,00 under section 114 (i) of the Customs Act, 1962. For his services, the appellant states to be paid commission by the Customs Brokers at mutually agreeable rates.
2. In the present case, the appellant is said to have procured the clearance, job of an export consignment of bamboo cane handicrafts 2 Customs Appeal No.76206 of 2016 being exported by M/s.Bhadrakali Export Private Limited, Nepal through M/s.Bose Enterprises, Kolkata - the CHA firm. The appellant submits that he in turn had procured the said business from one Arup Mukherjee of Calcutta. When the aforesaid transit consignment (CTD- Nepal export) was examined at Netaji Subhash Dock, Kolkata, the sealed container was found to contain 6560 kgs of red sander wood logs- an endangered species under CITES and Wildlife Protection Act, 1972 and prohibited for exports.
5. Scrutiny of the Customs Transit Declaration (CTD) No.295 dated 30.03.2014 and other relevant documents, revealed as under:
(i) Declared Exporter was M/s. Bhadrakali Export Pvt.Ltd., Kathmandu Nepal bearing PAN No.601377642.
(ii) Declared Consignee's name and notified delivery address was M/s. Transport Korea Co. Ltd., Room No.409, Dong-A JEIL Building, Jungang-Dong 4-Gajung-Gu Busan Korea
(iii) Container Number TRHU 2987633, having seal number HC 989783 and laden on vehicle number NL-01K-8424 was declared to have entered India through Raxaul Customs Border on 30.03.2014 and route in transit was declared as "Raxaul-
Motihari-Mujaffarpur-Patna-Nawada-Barhi-Dhanbad-Asansol- Panagarh-V Bridge-Kolkata".
(iv) 56 packages of Nepalese Cane Handicrafts Goods under H.S. Code 6913.90, having net weight 5900 kgs and valued USD 15972.00 was declared to be laden in the said container. 3
Customs Appeal No.76206 of 2016
(v) A certificate of origin, issued by the Federation of Nepalese Chamber of Commerce & Industry (FNCCI) bearing number 192763 was enclosed.
(vi) Commercial Invoice of M/s. Bhadrakali Export Pvt.Ltd. was d under number BEPL 07/70-71 dated 28.03.2014 showing quantity as 124 pcs of basket, stool, cloth stand etc. contained in 56 packages.
(vii) Entry gate pass bearing number EBP14004778 dated 07.04.2014 was issued by KoPT authority at 16.11.20 hrs for entry of vehicle number JL-01K-8424 in favour of the driver Sri Sujit Kumar Roy (having driver I.D. S46764, ISSUED BY KoPT) for the purpose of unloading of container number TRHU2987633 [20'] in loaded condition, container agent being 'Hanjin Shipping India Private Limited' and CHA being 'Bose Enterprise'.
(viii) Export Cart-in Order issued by Bose Enterprise, 4, N.S. Road, Standard Chartered Building, Kolkata-700001 for entry of container number TRHU-2987633 [20'] containing the export consignment of M/s. Bhadrakali Export Pvt.Ltd.
(ix) Toll Tax receipt No.1330 dated 05.04.2014 of Toll Booth at Arraria-Ranigunj Road.
(x) Toll Tax Receipt no.1175 of National Highway Authority of India, Barsoni Toll Plaza.
(xi) Toll Tax Receipt dated 02.04.2014 of National Highway Authority of India, Parsoni Khem Toll Plaza at 468 km of Kotwa- Mehsi-Muzaffarpur on NH-28.
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Customs Appeal No.76206 of 2016
(xii) Toll Tax Receipt vide ticket number 0A02-8676 dated 02.04.2014 [time 19.00.59 hrs] of National Highway Authority of India, Naruar Toll Plaza.
(xiii) Toll Tax Receipt vide ticket number 01-05-377257 dated 02.04.2014 [time 10.01.49.hrs] of National Highway Authority of India, Maithi Toll Plaza [Muzaffarpur to Darbhanga].
6. We have heard the two sides and perused the case records.
7. The Ld. Counsel for the appellant submits that his role was limited only to the procurement of the order on commission basis for and on behalf of his clients, the Customs Brokers and had no role to play beyond the same in the export of the said consignment.
8. The Ld.Authorized Representative for the Department, reiterates the findings of the lower authority and submits that the appellant had been penalized for his complicity in the export of red sanders.
9. Pursuant to the investigations conducted a show cause notice was issued pointing out that one Sujan Sharma was the mastermind and key person with regard to the shipment and the attempted export of red sanders wood under the garb of handicraft goods. The show cause notice also points out the involvement of the said person in export of similar consignment elsewhere on the strength of fictitious documents and interdiction thereof having been done on the very day at Muzaffarpur. It also notes that the whereabouts of Sujan Sharma remained untraceable ever since the case was registered. In so far as the present appellant is concerned, the show cause notice dwells on the role played by him as below:
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Customs Appeal No.76206 of 2016 "28 (d) Shri Srikanta Adhikary, 67, Nivedita Sarani, Bally, Durgapur, Howrah, was working as Clearing Agent for the CHA firm M/s. Bose Enterprise. He was in direct touch with Sujan Sharma and from the facts as mentioned above, it appears that Shri Srikanta Adhikary knowingly associated himself with Shri Sujan Sharma in order to facilitate him the smooth clearance of the contraband goods.
In his statement, he stated that he had got in touch with Sujan Sharma through Arup Mukherjee. CDR analysis of the mobile number used by Sujan Sharma revealed that he was in constant touch with Shri Sujan Sharma. It also appears that Shri Srikanta Adhikary helped Shri Sujan Sharma to find out a business place (table space) at 29, R.N. Mukherjee Road, Kolkata-700001 and also indulged in processing of documents for customs clearance through CHAs, using his credentials. It also appears that he had knowingly involved himself in this smuggling activities against monetary consideration and avoided to provide crucial information regarding the whereabouts of Shri Sujan Sharma. It thus appears that Shri Srikanta Adhikary had rendered himself liable for penal action under Section 114(i) of the Customs Act, 1962 for his aforesaid omission."
10. Before dwelling on the order of the lower authority, it would be appropriate to refer to section 114 (i) of the Customs Act vide which the appellant has been subjected to penal liability.
114. Penalty for attempt to export goods improperly, etc. 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 greater;
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Customs Appeal No.76206 of 2016
11. The adjudication order under challenge, while dwelling on the role of Srikanth Adhikari in the attempted export of red sander wood has the following to state :
"9. Shri Srikanta Adhikary, 67, Nivedita Sarani, Bally Durgapur, Howrah (as named by Shri Sudipta Bose of CHA firm M/s. Bose Enterprise, as the person from whom he received the job) was examined under Section 108 of Customs Act, 1962 on 25.04.2014. He stated inter-alia that, he was working as a Clearing Agent in the CHA firm named Bose Enterprise. He was doing this work for last 29 years in different CHA firms. He did not receive export order directly from Nepalese exporter named Bhadrakali Export Pvt.Ltd. Shri Arup Mukherjee having mobile no.9874277138 gave him the documents regarding the instant export order. Shri Arup Mukherjee never mentioned about the goods actually found stuffed in the container no.TRHU 2987633. Shri Arup Mukherjee gave him one sealed envelope and one copy of export CTD, Invoice, Packing List, Certificate of Origin and LOA regarding export of Bamboo Cane Handicrafts by M/s. Bhadrakali Export Pvt.Ltd., Nepal. He knew Sujan Sharma who resided at 8, Babulal Lane, Kolakta-700006, was a broker and user of mobile no.9831721256, 8334860735. He knew him for last 2.5 years. He met with them in Custom House, Kolkata two and half years ago and thereafter, they became friends. He used to give him work related to clearing of export & import consignments. Arup Mukherjee told him that the consignment of Bhadrakali Export Pvt.Ltd. was given by said Shri Sujan Sharma. He also undertook work directly from Sujan Sharma many times. Being questioned to give details of Shri Sujan Sharma, he stated that Shri Sujan Sharma had office at 29, R.N.Mukherjee Road, 2nd Floor in the name and style of Arihant Logistics. He introduced him to M/s. A.M. Jordan Pvt.Ltd. the owner at the space for renting a table place to Sujan Sharma. He also confirmed that Sujan Sharma used to stay at 8, Babulal Lane (Near Satya Narayan Park, Thakur Mahal), 3rd Floor and he met him twice there; that, Shri Arup Mukherjee gave him the information like vehicle no. of the instant consignment (Nepal CTD) about their arrival at NSD Port, 7 Customs Appeal No.76206 of 2016 which was later on seized by DRI Kolkata; that, he did not receive any call from Sujan Sharma after the interception of the consignment on 07.04.2014 as his phone was switched off. Thereafter, he made call to his close associate Vinod Gupta at 09430984751 as Vinod used to pay him on behalf of Sujan Sharma. Vinod was working at Raxaul border and used to do clearing work there; that, he failed to explain how goods i.e. wooden logs, suspected to be red sanders other than the declared one in Nepal CTD Export consignment was found in the container no TRHU 2987633, intercepted by DRI
12. From the aforesaid testimony of the appellant, it is evidently clear that the appellant had a close business relationship with the kingpin/mastermind of the case, that his testimony regarding working as a commission agent is not borne out of records, that the appellant had himself admitted before the authorities that he was an employee of Bose Enterprises - CHA firm in the case. It is admitted by the appellant that he had worked for Sujan Sharma in the past as well, facilitated seeking of an office for him, had visited his residence at least on two occasions in the past, had known his other business contacts like Vinod Gupta etc.. All this is reflective of the close business nexus between the appellant and the prime accused. The various admissions have been further corroborated by way of technical inputs such as call data record (CDR). This testimony of Shrikant Adhikari was however never retracted. Moreover, there is direct corroboration between the assertions of Shrikant Adhikari vis-à-vis that of some of the other co-accused and investigations undertaken by the department. It is thus borne out from records that the appellant was in direct touch with the key conspirator Sujan Sharma and had 8 Customs Appeal No.76206 of 2016 knowingly associated with him in the facilitation and smooth clearance of the subject attempted export.
13. As for the role of Arup Mukherjee a co-accused, who the appellant alleges to have brought him in touch with Sujan Sharma and had also sourced him the subject shipment, the findings of the lower authority in the order is as under :-
"(e) Sri Arup Mukherjee worked like a middleman. He used his firm 'Shiva Trading Co., Janai Station Road, Chikrad, Garbagan, P.S. Chanditala, Hooghly to raise bill to M/s. Arihant Logistics and worked as a middleman in between the facilitator i..e M/s. Arihant Logistics and the CHA i.e. M/s. Bose Enterprise. Shri Sujan Sharma, Shri Arup Mukherjee and Shri Srikanta Adhikary appear to have acted in a pre-
planned manner. It appears that he acted as a service provider to M/s. Arihant Logistics. Payments for booking of container were received by him, thereafter, Shri Arup Mukherjee made payments to container agent, CHA and other persons involved in this shipment. The chain system was utilized to avoid easy detection of money transfer. It thus appears that Shri Arup Mukherjee had rendered himself liable for penal action under Section 114(i) of the Customs Act, 1962 for his aforesaid omission."
14. In view of the aforesaid, the plea of the appellant that he was mainly acting as a commission agent actually does not hold any substance and is not borne out with evidence. In any case it is a recorded fact and an admitted position by the appellant that he had procured the consignment and handed over the consignment documents to the Customs Broker for onward clearance. It is an admitted fact that the appellant was not only in constant touch with the mastermind who remained unreachable for the authorities but also known common associates like Vinod Gupta working at Indo-Nepal 9 Customs Appeal No.76206 of 2016 border. It is an undisputed position that the appellant had helped identify Office space at Kolkata for the key conspirator. All this establishes the fact that the appellant was throughout working in close proximity with the key conspirator Sujan Sharma in this case. It, therefore, belies logic that the appellant without having any idea about the nature of export cargo, chose to assign the export work to the Customs Broker firm of which he admitted to be an employee. The complicity and nexus of the appellant thus is undisputed. It is obvious that the appellant for certain monetary considerations has played the role of a middleman between the actual operators and perpetrators of the crime and the exporters. The role of the proprietor of M/s. Arihant Logistic Sushant Sharma has been well documented in the show cause notice and thoroughly analysed by the adjudicating authority in the order. It is however, paradoxical that the conspirator himself remained elusive and could not be nabbed by the investigaing authorities. It has been admitted by Arup Mukherjee, from whom the appellant is said to have procured the subject import, that the former would make payments to him at times in his office. Incidentally, this office space was found to be vacated two months prior to the date of visit by the officers of the DRI, may be as a consequence of the investigations hotting up. The appellant has himself admitted to the investigators that he had not received any call from the key conspirator Sujan Sharma after the interception of the consignment on 07.04.2014, as his phone was switched off, and that he had checked up for some details from a third person and a close associate at Raxaul named 10 Customs Appeal No.76206 of 2016 Vinod, who was working at border and used to do the clearing work there.
15. We are thus of the view that the appellant has been rightly subjected to penal proceedings under the Customs Act. However, we note that the penalties imposed on the appellant are not commensurate and in proportion to the role and involvement of the appellant in the attempted export of red sanders wood logs. We are of the view that under the facts and circumstances of the case and our findings above, a penalty of Rs.1,00,000 (Rupees One Lakh), would meet the ends of justice.
16. We thus while upholding penalty imposed, reduce the quantum thereof to Rs.1,00,000/- (Rupees One Lakh) and dispose the appeal filed in the aforesaid terms.
(Order pronounced in the open court on 04.07.2024.) Sd/ (R. MURALIDHAR) MEMBER (JUDICIAL) Sd/ (RAJEEV TANDON) MEMBER (TECHNICAL) sm