Custom, Excise & Service Tax Tribunal
M/S Cargosol vs C.C.-Kandla on 7 April, 2017
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : C/110,270,296/2008 (Arising out of OIO-KDL/COMMR/17/2008 dated 31/03/2008 passed by Commissioner of CUSTOMS-KANDLA) 1. M/s Cargosol 2. M/s Omega Shipping Agencies Pvt Ltd 3. M/s Jaikumar P Ramdasani : Appellant (s) Versus C.C.-Kandla : Respondent (s)
Represented by:
For Appellant (s) : Shri Manish Jain, Shri T. Vishwanathan, Advocates For Respondent (s): Shri S. K. Shukla, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing: 04.04.2017 Date of Decision: 07.04.2017 Order No. A/10756-10758 / 2017 Per: Mr. Raju This appeal has been filed by M/s. Cargosol. The appellant are charteres and shipping agents, in respect of vessel M. V. Ali-15, (herein after referred to as vessel), which arrived and berthed at Kandla. On 10.02.2007 IGM of NIL transit cargo/NIL cargo on board was filed. However when the officers boarded the said vessel it was found that that cargo in the form of used cranes, rollers etc were noticed in the hatch area. Since, the master of the vessel could not produce the supporting documents, the said undeclared good were detained on 10.02.2007 and handed over of the master of vessel vide detention memo- dated 10.02.2007. On investigation, it was found the said cargo was not declared in the IGM. On suspicion that the goods had contravened of Section 30 of the Customs Act, 1962 read with Regulation 5 of the Import Manifest (Vessel) Regulation 1971 and on a reasonable belief that the said goods were liable for confiscation under Section 111 (f) of Customs Act, 1962, the same were placed under seizure vide panchnama dated 13.02.2007. In the statement, the master of the vessel interalia stated that the said goods were loaded from Jabel Ali for discharge at Mumbai, but, following a verbal communication from the Charterers of the vessel, the vessel was brought to Kandla instead of Mumbai to undertake a fresh voyage from Kandla to Sultan Qabos (Oman) alongwith the said goods. He further informed that he filed same bottom cargo declaration as NIL in consultation with the representative of the Shipping Agent Shri Jaikumar Ramdasani. Shri Jaikumar Ramdasani representative of the Shipping Agent stated that he was appointed as the shipping agent by M/s. Cargosol, Mumbai who was the charterers of the vessel and he had filed the IGM based on documents/information received from the charterers.
1.1. M/s. Cargosol, vide their letter dated 22.07.2007 addressed to Assistant Commissioner, Kandla, stated that the said vessel sailed from Dubai with the said cargo. They informed that the said cargo was intended to be unloaded at the Mumbai Port. They had also contracted by M/s. Tube Trading Co. to load export cargo from Kandla to Muscat. Due to bad whether the ship got delayed at Karachi and therefore the route of the ship was changed and instead of Mumbai, it sailed to Kandla to load the pipes meant for export to Muscat. They also informed that it was a clerical error due to which they failed to inform their shipping agents about the cargo in the said ship. M/s. Cargosol also requested for provisional release of the goods and requested that the said vessel should be allowed to sail with the above cargo to Mumbai port, where the said cargo will be discharged and then the vessel will sail to Muscat with the export cargo from Kandla. On 19.02.2007, Ms/. Cargosol tendered an undertaking and bond to the Commissioner of Customs, Kandla wherein they, on behalf of the Master of the vessel and the shipping agent, undertook to pay and levies, taxes, fine, penalties etc, that may be imposed on the goods and also to deliver them to final consignees. Accordingly the goods were released provisionally on furnishing of bond for Rs. 1.70 crores and bank guarantee for Rs. 45 lakhs and an undertaking by the said M/s. Cargosol to land and clear the said goods on payment of appropriate import duty at Mumbai. Accordingly, the vessel was granted port clearance on 06.04.2007 for its voyage to Muscat to Mumbai. However, the vessel was diverted to Jabel Ali. Subsequetly, M/s. Cargosol submitted that the said goods were subsequently discharged by different vessel in Mumbai where they were cleared from customs. However, used Fuan Trunk Crane was discharged at Dubai and not brought to Mumbai. On comparison of the weight and value goods claimed to have been discharged at Mumbai, by M/s. Cargosol, with the weight and value of the goods which were seized at Kandla, it was noticed that there was a variation. On the basis of the said variation it was alleged that the said goods unloaded at Mumbai are not the same goods which were seized. Notice was issued to the appellant demanding duty on the said goods. Notice also sought the confiscation of the goods and imposition of penalty on the appellant. Penalty was also sought to imposed Shri Satyajit Santoshkumar Mondal, Master of the vessel MV Ali-15 under Section 112 (a) of Customs Act, 1962 and Shri Jaikumar Parmanand Ramdasani, Branch incharge of M/s. Omega Shipping Agencies P. Ltd The Commissioner of Customs confirmed the demand of duty on the said goods. He also confiscated the said goods, which were provisionally released against bond and Bank Guarantee. He imposed redemption fine of Rs. 10 lakhs. A penalty of Rs. 5 lakhs was imposed on the appellant M/s. Cargosol. Penalty of Rs. 5 lakhs was also imposed on M/s. Omega Shipping Agencies P. Ltd. The penalty of 50,000/- Shri Satyajit Santoshkumar Mondal, and on Shri Jaikumar Parmanand Ramdasani, Branch Incharge of M/s Omega Shipping Agencies P. Ltd. Aggrieved by the said order, the appellants are before Tribunal.
2. Ld. Counsel for the appellant M/s Cargosol argued that it was a genuine mistake on their part. The said cargo was originally intended for Mumbai Port, however, due the change of plan the ship sailed from Karachi to Kandla to load export cargo. The change in route was attributed to bad whether the ship experienced in Karachi. He argued that there was no intention to smuggle goods or violate any Rules or Section. He argued that they have applied for amendment of IGM and same is allowed by the Customs Authority of Kandla. He further argued that the goods were not imported into India in so far as the goods remain on the vessel. Moreover, the appellants are not the importers of the goods and therefore the duty cannot be recovered under Section 28 of Customs Act, 1962 form the appellants. It was argued that the appellants are not the owners of the seized goods. He relied on the definition of importer appearing in section 2 (26) of the Customs Act, 1962. He relied on the decision of Honble Bombay High Court in the case of Commissioner of Customs vs. Jupiter Exports, 2007 (213) ELT 614 (Bom.). He argued that since the goods were not cleared for home consumption and hence, no duty liability arises. He further argued that undertaking/bond given for provisional release of the goods cannot be use to recover duty/redemption fine from the appellant as the same was given under duress as the vessel was seized. Further he argued that in the said undertaking/bond given by the appellants they do not undertake to pay the duty. He argued that in terms of Section 69 of the Customs Act, 1962, the goods can be re-exported after allowing drawback under Section 74 for the said exports. He further argued that since IGM amendment has been allowed the confiscation of the goods under Section 111(f) of the Customs Act, 1962 is legally untenable. It was further argued that the Commissioner has not disputed that this impugned imported goods were later on imported at Mumbai Port and appropriate duty was paid by the said importers.
2.1. In view of above, Ld. Counsel argued that the demands of duty confiscation of penalties need to be set-aside.
3. Ld. AR relies in the impugned order, he argued that the said goods/ship was never intended to move from Kandla to Mumbai and the said assertion made by the appellant was a deliberate false assertion. For this relies of the statement of the Master of the ship. He further argued that the IGM filed in Karachi, shows the said cargo, however, the appellant failed to correctly file the IGM in Kandla.
4. We have gone through the rival submission, we find that the appellants were the charterers and shipping agents of the vessel. When the cargo was seized the appellants came forward for provisional release of the said cargo. Section 2 (26) of the Customs Act defines importer as follows:-
(26) importer, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer; It is the apparent that by the action of coming forward and taking responsibility of the impugned goods and seeking provisional release of the said goods, the appellant have stepped into the shows of the importer. The bond executed by the appellant contained the following Clause:-
Bond (With Security) to be entered into by person seeking release of goods seized pending adjudication We M/s Cargosol (hereinafter called the obligator(s) are jointly and severally bound to the President of India (hereinafter called the Government) in the sum of Rs. 1,70,00,000/- be paid to the Government for which we jointly and severally bind ourselves and out legal representatives.
Whereas a quantity of Panchnama (hereinafter called the said goods) belonging to the obligators (s) are seized by the Customs Officers Range/Circle/Division (hereinafter called the said officer) for An alleged offence (under the Customs Act 1962 and the rules made thereunder) And whereas the said officer has required the obligator(s) to deposit as guarantee for the amount of this bond the sum of Rs. 1,70,00,000/- in cash. The securities as herein under mentioned of a total face value of Rs. 1,70,00,000/- endorsed in favour of the President of India and accepted on his behalf by the Commissioner of Customs.
And whereas pending adjudication of the case by the competent officer, the said officer has under section 110(A) of Customs Act, 1962 agreed to release the obligator(s) the said goods on the obligator(s) executing the bond in the manner aforesaid.
We agree that the Govt. shall be at liberty to appropriate the said deposit towards payment of the amount of duty/value/penalty/other lawful charges, as may be assessed by the competent authority in respect of the goods.
And we declare that this bond is given under the orders of the Customs/Govt. for the performance of an act in which the public is interested.
They had admitted in the bond that the goods belong to the obligators. It is apparent that from the language of the said the appellant have claimed that the goods belong to them and therefore they have come forward to get the provisional release of the same. Thus, the appellants are clearly importers in terms of the definition appearing in the Customs Act. It is seen that the decision of Honble Bombay High Court in the case of Jupiter Exports, is not relevant to the instant case. The facts in the said case are totally different. It is seen that the Commissioner has relied on the decision of Tribunal in the case of Oceanic Shipping Agency Pvt. Ltd. Vs. C.C., Calcutta 1996 (82)ELT 57 (Tribunal) and on the decision of Commissioner of Customs (Imports) New Customs House, Mumbai vs. Petvolk 1996 (82) ELT 57 (Bom.). In both the decisions it has been held that when the goods are not diclared in the IGM, the same are liable to confiscation under Section 111(f) of the Customs Act, 1962. In these circumstances, we uphold the confiscation of the said goods and consequently also the imposition of penalty under Section 111 and 112 respectively.
3.1 In so far as the demand of duty concerned, the SCN disputes the contention of the appellant that some of the goods were subsequently brought to Mumbai. The SCN also alleges that the goods cleared at Mumbai were not the same is the goods which were seized by the customs. The impugned order fails to deal with the issue and to categorical state if the goods were later on imported into India or not. The impugned order is silent on that aspect. In view of above, the demand of duty is set-aside and the matter is remanded for decision on facts regarding the re-import of goods and the duty liability of the appellant.
3.2 It is seen that the penalty of Rs. 5,00,000/- on M/s Omega Shipping Agencies P. Ltd. The SCN does not even alleged any convenience or knowledge about the misdeclaration on the part of said shipping agent. In absence of the knowledge the penalty of Rs. 5,00,000/- appears excessive. The penalty is therefore revised to Rs. 5,000/- only. For the same reason, the penalty on Shri Jaikumar Parmanand Ramdasani is reduced from 10,000/- to 5,000/- only.
(Order pronounced on 07.04.2017) (D. M. Misra) (Raju) Member (Judicial) Member (Technical) G.Y. ??
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8Appeal No. C/110,270,296/2008