Custom, Excise & Service Tax Tribunal
M/S. Sudarshan Cargo Pvt. Ltd vs Commissioner Of Customs (Export), ... on 29 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. C/1014, 1084/08 - Mum
(Arising out of Order-in-Original No. 97/2008 dated 31.01.2008 passed by the Commissioner of Customs (Export), Nhava Sheva, Raigad)
For approval and signature:
Honble Shri Ashok Jindal, 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 : 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?
M/s. Sudarshan Cargo Pvt. Ltd.
M/s. Garware Wall Ropes Ltd.
:
Appellants
Versus
Commissioner of Customs (Export), Sheva
Respondents
Appearance Ms. Rukmini Menon, Advocate with for Appellants Shri. Bharat Raichandani, Advocate Shri P.K. Agarwal, SDR for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 10.07.09 Date of Decision : 29.07.09 ORDER NO.
Per : Shri. Ashok Jindal, Member (Judicial) These appeals are filed by M/s. Sudarshan Cargo Pvt. Ltd. (the CHA) against the imposition of penalty of Rs.1 lakh under Section 114 (111) of Customs Act, 1962 and by M/s. Garware Wall Ropes Ltd. (the Exporter) against the imposition of redemption fine of Rs.5 lakhs under Section 125 of the Customs Act and a penalty of Rs.1 lakh under Section 114 (111) of the Customs Act, 1962.
2. Brief facts of the case are that the exporter exported one factory shipped container containing 183 packages of HDPE fishnet / HDPE Braided Twin Nylon Net covered by Shipping Bill No. 4894148 dated 05.01.07. The said container was loaded on the vessel, which sailed on 09.01.07 without the Let Export Order from the proper officer of Customs. Penalties have been imposed by the Commissioner on the exporter and the CHA on the ground that there is no evidence to show that they had made any genuine attempt to stop the container from being loaded before the sailing of the vessel. Further, the CHA misled the Shipping Line by giving wrong assurance that the shipping bill is being processed and will be submitted immediately after sailing of the vessel.
3. Heard.
4. The appellants contended that the CHA filed the shipping invoices before the customs authorities but on pointing out that the container number is not correct, the CHA sent the invoices to the exporter for amendment of typographical error of the container number by Central Excise authorities and the same was received back by them on 12.01.07 and therefore on the same day they registered the shipping bill and obtained LEO from the proper officer of the customs. It is the fact that the goods were loaded into the vessel and the same was sailed on 09.01.07.
5. The learned Counsel for the CHA submitted that the container was brought inside the port by them and kept in the container yard with instructions to the shipping line that the registration of the shipping bill and its processing was being done and that after the let export order was obtained the same would be handed over to them (shipping line).
6. The learned Counsel for the exporter submitted that they had received the Central Excise invoice for amendment of container number and the same was amended and immediately it was sent but on 12.01.2007 after the receipt of amended Central Excise invoice, the CHA had registered the shipping bill and obtained LEO from the proper officer of Customs i.e. after sailing of the container on the vessel on 09.01.2007.
7. It was also submitted by the learned Counsel for the appellants that the penalty could not be imposed on technical ground as in this case.
8. The contentions of both the appellants are that they do not have any control over the container, once the same is permitted inside the gate. It is the responsibility of the shipping line to see that the container is loaded after receipt and verification of all the documents including the LEO. Hence, they are no way responsible for the container being loaded on to the vessel prior to the LEO. Hence, the question of their making any genuine attempt to stop the container from being loaded on the vessel does not arise at all.
9. The exporter also contended that the redemption fine cannot be imposed on the appellant as the goods were not available for confiscation and relied on the decision of the Larger Bench in the case of Shiv Kripa Ispat Pvt. Ltd. vs. CCE & Cus., Nasik 2009 (235) ELT 623 (Tri. LB) wherein it was held that as the goods were not available for confiscation, the redemption fine was liable to be set aside.
10. The learned Counsel for the exporter with regard to penalty placed reliance on the decisions in the cases of Oriental Containers Ltd. vs. Union of India 2003 (157) ELT 503 (Bom) wherein it was held that no penalty can be imposed without any allegation about malafide and without establishing contumacious conduct and Steel Authority of India Ltd. vs. CC 2001 (136) ELT 316 (Tri.- Kolkata) wherein it was held that penalty could not ordinarily be imposed unless the party obliged was acting deliberately in defiance of law, or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation penalty will also not be imposed merely because it is lawful to do so.
11. Learned Counsel appearing for the CHA placed reliance on Shree Shipping Services vs. CC (Airport), Mumbai 2005 (179) ELT 284 (Tri.- Mum) wherein it was held that appellant taken every precaution to see that goods not put on board and only having acted in accordance with law, no penalty is imposable on him. Further he relied on Safe C & F. Agency P. Ltd. vs. CC (Export), Nhava Sheva 2007 (210) ELT 225 (Tri. Mum) wherein it was observed that CHA took reasonable precautions for issuing N.O.C and in these circumstances when the CHA taken precautions penalty cannot be imposed.
12. On the other hand Shri. P.K. Agarwal, ld. SDR submitted that it is the responsibility of the exporter and the CHA (who is working on behalf of the exporter) that the goods should not be loaded before obtaining the LEO and it is undisputed fact that the goods has been loaded on the vessel prior to obtaining the LEO. He placed reliance on Zenith Rubber & Plastic Works vs. CC (Export), Nhava Sheva 2009 (238) ELT 646 (Tri. Mum), Tribunals Orders No. A/124-125/09/CIV/SMB dated 06.04.2009 in Appeal Nos. C/982 & 1030/08 in the case of Mehta Exports and Ors. and A/310-312/2009/SMB/C-IV dated 04.06.2009 in Appeal Nos. C/419, 420, 530/08 in the case of Kusters Calico Machinery Ltd. and ors. wherein it was held that the exporter, CHA and shipping line shared penal liability under Section 114 of the Customs Act by their commissions / omissions which rendered the goods liable to confiscation under Section 113 of the Act on the ground of breach of Section 51 and other relevant provisions of the Customs Act. For a penalty under Section 114, actual confiscation of the goods is not necessary. It is enough if the goods are liable to confiscation. The Commissioner found the goods so liable and this finding has not been successfully challenged in this case, imposition of penalty was confirmed.
13. On examination of the facts and circumstances of the case and the case laws placed before me by all the parties, I am of the view that the CHA had to be vigilant to inform the shipping line that the shipping bill has been sent to the exporter for amendment of the container number and it was not received back by 9.1.2007, the day of the loading of the goods into the vessel.
14. In this term, I hold that that the exporter, CHA and the shipping line all liable for the penal action under Section 114 of the Customs Act.
15. As the goods are not physically available for confiscation and were allowed to be cleared without execution of bond / undertaking, hence following the Larger Bench decision in the case of Shiv Kirpa Ispat (supra) I vacate the redemption fine.
16. With regard to the penalty, I find that the penalties imposed on the appellants are too high. So I reduce the quantum of penalty on the appellants i.e. the exporter and the CHA to Rs.50,000/- each.
12. In these terms the appeals are disposed of.
(Pronounced in Court on 29.07.09) (Ashok Jindal) Member (Judicial) nsk 6