Custom, Excise & Service Tax Tribunal
M/S Mitsui O.S.K. Lines (India) Pvt. Ltd vs Commissioner Of Customs (Export), ... on 25 February, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. C/512/09 (Arising out of Order-in-Original No. 131/08-09 dated 27.2.2009 passed by the Commissioner of Customs (Export), Nhava Sheva). For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) Honble Shri P.S. Pruthi, Member (Technical) ======================================================
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?
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M/s Mitsui O.S.K. Lines (India) Pvt. Ltd.
Appellant
Vs.
Commissioner of Customs (Export), Nhava Sheva
Respondent
Appearance:
Mr. Yogesh Patki, Advocate
for Appellant
Mr. M.S. Reddy, DC (AR)
for Respondent
CORAM:
SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
SHRI P.S. PRUTHI, MEMBER (TECHNICAL)
Date of Hearing: 25.02.2015
Date of Decision: 25.02.2015
ORDER NO.
Per: P.S. Pruthi
This appeal is directed against Order-in-Original of Commissioner of Customs (Export), Nhava Sheva ordering confiscation of 72 containers with option to redeem the same on payment of redemption fine, confirming duty demand with interest thereon and imposing personal penalties on the appellant as well as M/s Orient Ship Agency Pvt. Ltd. under Section 112(a) of the Customs Act.
2. The facts of the case are that M/s Orient Ship Agency Pvt. Ltd., a shipping line arranges import of goods in containers into India. The containers are exempted from payment of duty under Notification No. 104/94 dated 16.3.1994 subject to conditions laid down in the Notification. One of the conditions is that the importer by execution of a Bond binds themselves to re-export the containers within six months from the date of their importation and to furnish documentary evidence thereof to the satisfaction of the Assistant Commissioner and to pay the duty leviable thereon in the event of the importers failure to do so. This period of six months may be extended on sufficient cause being shown by the Assistant Commissioner for such further period, as he may deem fit. The said shipping line had executed Bonds in respect of the containers imported by them. The record of the containers imported and re-exported is maintained in a Key Register maintained by the Customs, which records the date of import as well as re-export. In the course of time, the appellant took over shipping line namely, M/s Orient Ship Agency Pvt. Ltd. and also took upon themselves all the liabilities including the undertaking given in terms of the Bond executed by Orient Ship Agency Pvt. Ltd. for the containers imported by the former.
2.1 A show-cause notice was issued both to the appellant as well as to M/s Orient Ship Agency Pvt. Ltd. asking them to show cause as to why duty should not be demanded in respect of 72 containers for which they failed to establish that the same have been re-exported. The show-cause notice was issued because the Key Register did not mention any details of re-export in respect of these containers. The case was adjudicated and the demand of duty was confirmed with option to redeem on payment of redemption fine. Penalties were imposed on both Orient Shipping and the appellant. On appeal before the CESTAT, the appellant took a plea that they have documents evidencing that the containers are lying outside India which need to be considered by the adjudicating authority. The Tribunal remand the case as under : -
12.?However, having upheld the liability to confiscation in the absence of documentary evidence, we feel that that in view of the special circumstances of the case where the liabilities were taken over by one agent from other and in view of the counter allegations between the two agents that the necessary documents were not furnished to them, the secondary evidence submitted by the appellant regarding proof of export of containers outside India cannot be completely discarded. Now that the appellants are able to produce evidence that the container is lying outside India as per the computer data regarding status of container furnished by the appellant, it should be accepted as proof of export subject to verification that such container is lying outside India. There cannot be an illicit removal of container outside India as need for the same would not arise because on re-export there is no duty and in fact the re-export will save the appellant from consequence of paying duty. Even if it is presumed that the container has been sold to some other person, a re-export by him will also be valid as in the present case customs has recognised Mitsui OSK India as a person taking over the responsibility of export even though the imports have been made by Orient Shipping. Therefore, such secondary evidence should be considered. The same will not be so in cases, where there is no evidence to show that the container is either lying outside India or has been scrapped by leasing agency. Thus, where the data sheet shows that they did not have any data to show regarding any transaction or disposal by the leasing company, then such containers cannot be considered as having been exported outside India and such containers for which there is no evidence shall be liable for confiscation and duty will be demandable.
13.?For the above purpose, we remand the matter to the Commissioner with a direction that the secondary evidence should be considered by him in the peculiar circumstances of the case and where there is evidence to the effect that the container is lying outside India or has been disposed of by the leasing agency outside India after its import in India, such evidence should be accepted but where no further details are available or presumption has been made that the container might have been discarded or not available then they have to be treated as having not been exported outside India. It is made clear that the duty shall be demandable both from OSK and Orient Shipping, though first attempt should be made to demand from M/s. Mitsui OSK India and on their failure from Orient Shipping as in any case, Orient Shipping in terms of arbitration spelt out by them can recover the same from their principal. Liability to penalty is also upheld on both the appellants for having dealt with the goods which have been held liable for confiscation. However, the quantum of redemption fine and penalty shall be redetermined in the remand proceedings taking into consideration the ultimate duty liability upheld and the number of containers held as being liable to confiscation. Appeal is partly allowed by way of remand.
2.2 It may seen from above that the matter was remanded to the adjudicating authority with specific directions to consider the secondary evidence of proof of re-export and to accept the evidence, the Commissioner in the impugned order held that the appellant have not disclosed from where the printout regarding the secondary evidence was taken, the source of evidence is also not known and that secondary evidence as per Section 63 of the Indian Evidence Act, 1872 includes certified copies made from the original documents etc. Accordingly, he held that the appellant failed to produce secondary evidence which can be relied upon as lawful export of containers. According to him, the appellant should be able to produce shipping line documents showing that the containers were exported out of India. He ordered confiscation of 72 containers valued at Rs.73,25,000/- with an option to redeem the same on payment of Rs.15 lakhs, confirmed the duty demand of Rs.47,19,628/- and imposed penalty of Rs.5 lakhs each on the appellant as well as on M/s Orient Ship Agency Pvt. Ltd. under Section 112(a) of the Customs Act.
3. Heard both sides.
4. The learned Counsel appearing for the appellant during the first hearing had showed us copies of printouts obtained from the websites of the appellant shipping line i.e. M/s Mitsui O.S.K. Lines (India) Pvt. Ltd., which indicates the location of the container at any given point of time. The documents submitted by him showed the locations in the form of a code for each port location. He was requested to submit a note explaining the code of each port as well as the present logistic location of the containers, from their website. These documents have been produced by him today.
5. The learned A.R. appearing for the Revenue reiterates the findings of the Commissioner.
6. We have considered the submissions made by both the sides. The main point to be decided in this case is whether the documents submitted by the appellant indicating the location of the containers in various ports of the world should be accepted or not as proof of re-export. We find that CESTAT in its earlier order had given a finding that the secondary evidence produced by the appellant should be considered and also should be accepted. This order of the CESTAT was not challenged by the Revenue. The Commissioner in his order has rejected the evidence. We may, therefore, evaluate the evidence submitted by the appellant.
6.1 We find that the Commissioner made a bland statement that that the appellant has submitted the evidence in form of a computer printout showing the location of each container. The Commissioner has not made any effort to go into details of the print out. The Bench asked the learned Counsel regarding these documents produced and it was categorically stated by them that the location of any container can be seen even today by visiting the website of the shipping line i.e. the appellant. The print outs submitted by the learned Counsel for each of the containers on which duty has been demanded, give the status not only of the location of the container, but also other details such as whether a container has been scrapped or the container has been sold/transferred to other companies. We notice that the location of the container varies with time. But, the printouts indicate the location to be outside India, except in case of 11 containers. We see no reason to disbelieve the statement of the Counsel that the printout clearly indicates the present location of the containers. More so when the shipping line which deals with hundreds of containers would not be expected to manipulate the website records for a few containers for which demand of duty has been raised. We, therefore, accept the evidence provided by the learned Counsel.
6.2 The Commissioner relied on Section 63 of the Indian Evidence Act. We note that the Commissioner just defined Section 63 without further analyzing the provisions of the Evidence Act. According to the definition under Section 63, secondary evidence includes certified copies given under the provisions. But, he does not specify as to who has to certify the copies. Therefore, when the appellant himself certifies these copies, there should be no reason to reject this evidence. It would be rather unfair to expect the appellant to get a certificate from various port authorities all over the world when Revenue has not proved that the evidence submitted is false. In this view of the matter, we reject the finding of the Commissioner.
6.3 The learned Counsel admits that out of 72 containers, the location of 11 containers is not known to them and they fairly concede that they are ready to pay the redemption fine, duty and penalty proportionately. Therefore, we find it appropriate to remand the matter to the adjudicating authority. We have clearly held that secondary evidence submitted by the appellant is accepted. Therefore, the remand is only for the purpose of determining the duty payable on the 11 containers as well as the penalties and redemption fine, which should naturally be proportionate to the amount of duty which is payable.
6.4 The import took place in the year 1999-2000. The matter has already gone through litigation twice at the level of the Tribunal. We direct the Commissioner to decide the case within a period of three months of the receipt of this order after affording an opportunity of personal hearing to the appellant who, if required, may produce documents in relation to the value of the eleven (11) containers in question.
7. The appeal is partly allowed in the above terms.
(Dictated and pronounced in Court) (Anil Choudhary) (P.S. Pruthi) Member (Judicial) Member (Technical) Sinha 1