Custom, Excise & Service Tax Tribunal
Chunilal Clearing & Forwarding Pvt. Ltd vs Commissioner Of Customs (Ep), Mumbai on 22 December, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/34/10 (Arising out of Order-in-Original CAO No. 163A/2009/CAC/CC/RBT dated 23.10.2009 passed by Commissioner of Customs (EP), Mumbai) For approval and signature: Honble Mr. P.G. Chacko, 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?
====================================================== Chunilal Clearing & Forwarding Pvt. Ltd. Appellant Vs. Commissioner of Customs (EP), Mumbai Respondent Appearance:
Shri V.M. Doiphode, Advocate, for appellant Shri B.P. Pereira, Authorised Representative (JDR), for respondent CORAM:
Honble Mr. P.G. Chacko, Member (Judicial) Date of Hearing: 22.12.2010 Date of Decision: 22.10.2010 ORDER NO M/s. Jindal Saw Ltd. had imported a consignment of goods declared as alloy steel round bars and claimed its duty-free clearance under advance licence. Along with bill of entry dated 24.9.2009, the importer also produced other necessary documents such as invoice, packing list and mill test certificate (MTC). The goods were examined, whereupon it was found that a part of the goods was non-alloy steel. Since the MTCs in respect of all the goods were not made available, the importer was required to produce MTCs in respect of the remaining goods also. The goods were subsequently re-examined for segregation of the quantities of alloy steel and non-alloy steel. It was found that, out of the total declared quantity of 1444.90 MTs, only 519.27 MTs were found to be alloy steel. The remaining quantity of 924.63 MTs were found to be non-alloy steel, which was allegedly misdeclared by the importer. It was also observed that the invoice and packing list mentioned two grades of steel bars, viz. JSL 15C and JSL 2, the former being alloy steel and the latter non-alloy steel. In a letter dated 15.10.2009, the importer stated that the cargo contained 519.27 MTs of JSL 15C grade and 925.630 MTs of JSL 2 grade steel rods and further that they had clearly instructed their CHA to produce advance licences for both alloy and non-alloy steel. They stated that the CHA made a clerical error which resulted in declaration of the entire cargo as alloy steel. The importer further waived show-cause notice and personal hearing. The Commissioner of Customs (EP) heard the CHA as authorized representative of the importer and also considered the importers submissions contained in letter dated 15.10.2009. Ultimately, he confiscated the goods in terms of Section 111(m) of the Customs Act on the ground of misdeclaration and wrong classification. A fine of Rs.2,00,000/- was also determined to be paid by the importer in the event of opting for redemption of the goods. A penalty was also imposed on the importer. Moreover, the learned Commissioner imposed a penalty of Rs.50,000/- on the CHA. The present appeal is by the CHA.
2. After examining the records and hearing both sides, I have found valid reasons to set aside the penalty imposed on the CHA. It is an admitted fact that the importer had waived show-cause notice and personal hearing. Nevertheless, the learned Commissioner chose to hear the importer through the CHA. His order indicates that the CHA was heard as representative of the importer. There is nothing to show that the CHA was called upon to show cause why a penalty should not be imposed on them under Section 112 of the Customs Act, nor is there anything to indicate that any opportunity of being personally heard was given to the CHA. If the CHA was heard, they were heard only as representative of the importer. They never got an opportunity to argue for themselves against any proposal for penalty. Section 124 of the Customs Act mandates issuance of show-cause notice before imposing any penalty on any person under the Customs Act. The proviso to Section 124 says that such notice may, at the request of the person concerned, be oral. In the present case, no written show-cause notice was issued to the CHA, nor is there any indication of any oral notice having been given to them. Thus, the Commissioners order against the CHA is clearly in breach of the rule of natural justice embodied in Section 124. For this sole reason, the penalty on the CHA is liable to be vacated.
3. I have also found good ground for vacating the penalty on merits. The question in this context is whether the CHA in any manner abetted any offence of the importer. The offence found against the importer is misdeclaration of the description of the goods. It was found that non-alloy steel was misdeclared as alloy steel. However, the learned Commissioner did not find any loss to the Revenue on account of such declaration. It was found that the declaration of the goods as alloy steel was not prejudicial to the Revenue. It is also a fact found by the Commissioner that the importer produced advance licences for duty-free clearance of both alloy steel and non-alloy steel. In the event of such clearance not being allowed, the importer was ready to use DEPB scrips. In any case, any intent to evade any dues to the Revenue was not attributed to the importer. Such being the position of the importer, the CHA can hardly be held to have indulged in any commission or omission in the nature of abetment so as to attract Section 112(a) of the Act. In the case of Phil Corporation Ltd. vs. CCE, Goa 2001 (134) ELT 206 (Tri.-Mumbai) cited by the learned counsel, it was found by this Tribunal that the misdeclaration of description of the goods imported by the above company did not lead to any loss of revenue and, therefore, confiscation of the goods under Section 111(m) of the Customs Act was not sustainable. If the ratio of the cited decision is applied to the present case, the Commissioners order of confiscation itself will have to be set aside and, in that event, the penalty under Section 112 of the Act on the importer and on their CHA shall stand vacated. The learned counsel has also usefully cited CC vs. P.V. Ukkru International Trade 2009 (235) ELT 229 (Ker.). He has succeeded in showing that the adjudicating authority did not apply its mind to this decision of the Honble High Court. The Honble High Court, even while upholding the confiscation of goods under Section 111(m) of the Act, vacated the personal penalty imposed under Section 112 of the Act.
4. Thus, in any case, the penalty imposed on the CHA cannot be sustained and hence the same is set aside. The appeal stands allowed.
(Pronounced in Court) (P.G. Chacko) Member (Judicial) tvu 1 5