Custom, Excise & Service Tax Tribunal
7. M/S. Andhra Pradesh Forest ... vs Commissioner Of Customs (Port Export) on 21 July, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/121 126/2010
(Arising out of Order-in-Original No. 10090/2009 dated 20.11.2009, passed by the Commissioner of Customs, Chennai).
C/315 317, 321/2010
(Arising out of Order-in-Original No. 10906/2010 dated 23.04.2010, passed by the Commissioner of Customs, Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri R. PERIASAMI, Technical Member
______________________________________________________
1. Whether Press Reporters may be allowed to see 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 the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? ______________________________________________________
C/121 126/2010
1. M/s. Andhra Pradesh Forest Dev.Corp.Ltd. C/121/10
2. Shri P.V. Shashidhar C/122/10
3. Shri T. Suresh Kumar C/123/10
4. Vice Chairman & Managing Director of M/s. Andhra
Pradesh Forest Dev.Corp.Ltd. C/124/10
5. M/s. Koyei Trading Company Ltd. C/125/10
6. Shri G. Nathavel C/126/10
C/315 317, 321/2010
7. M/s. Andhra Pradesh Forest Dev.Corp.Ltd. C/315/10
8. Shri C. Sivasankara Reddy, Vice Chairman & Managing
Director of M/s. Andhra Pradesh Forest Dev.Corp.Ltd.
C/316/10
9. Shri M Renganathan C/317/10
10. Shri P. Rakesh Reddy C/121/10 : Appellants
Vs.
Commissioner of Customs (Port Export),
Chennai : Respondents
Appearance Shri S. Murugappan,Adv., for rest of the appellants Shri S. Raghunathan, Adv., for G.Nathavel (C/126/10) Ms. Indira Sisupal, AC (AR) for the respondents CORAM Honble Shri P.K. DAS, Judicial Member Honble Shri R. PERIASAMI, Technical Member Date of Hearing : 21.07.2014 Date of Decision: 21.07.2014 FINAL ORDER No. 40832-40841 / 2014 Per: P.K. Das Common issue involved in these appeals and therefore, all are taken up together for disposal.
2. The relevant facts of the case, in brief, are that the export of Red sanders is prohibited under the Foreign Trade Policy Schedule 2, 2004-2009, as the goods are covered under the Convention on International Trade in Endangered Species (CITES) in Appendix II, which prohibits the trade of Red Sanders. The Ministry of Commerce and Industry, Govt. of India, by Public Notice No.94/2006 and 07/2007 permitted export of Red Sanders in log form, by M/s. Andhra Pradesh Forest Development Corporation, Hyderabad (in short APFDC) to M/s. Kyoei Trading Company, Japan (in short M/s. Kyoei) and M/s. Radeep Services, Singapore (in short M/s. Radeep). Accordingly, APFDC entered into an agreements with both the companies for export of Red sanders. Both the companies placed purchase orders and APFDC applied for license to DGFT for export of the Red sanders. DGFT issued licenses to APFDC to export the impugned goods to M/s. Kyoei and M/s. Radeep. APFDC as per Public Notice no. 94/2006 exported Red sanders to M/s. Kyoei vide shipping Bill No. 2385733 dated 4.7.2006, 2397228 dated 18.07.2006 and 2397229 dated 18.07.2006 and to M/s. Radeep vide shipping Bill No. 2395917 dated 17.07.2006. As per Public Notice No. 7/2007 APFDCL filed shipping bill No. 2731349 dated 21.07.2007 and another shipping bill No. 2732255 dated 21.07.2007 for export of Red sanders to the quantity of 177.49 MTs each in log form to M/s. Kyoei and to M/s. Radeep respectively. On 26.07.2007, the consignments were detained by the Customs authorities, Chennai. As per Customs authorities, in the case of export to M/s. Radeep, the goods were not covered by the valid CITES permit as per the format. In the case of export to M/s. Kyoei, the shipping bill invoice showed M/s. Ocean Trading Company, Hong Kong as the buyers name and not to M/s. Koyei as mentioned in the Public Notice. The Bill of Lading shows the destination as Hong Kong, who is an intermediary. Subsequently, the cargos were seized by the customs authorities. APFDC applied to the customs authorities for amendment of the Bill of Entry No. 2731349 dated 21.07.2007, for deleting the partys name M/s. Ocean Trading Co., Hong Kong, and to substitute M/s. Kyoei Trading Co. Ltd., Japan. With regard to Shipping Bill No. 2732255 dated 22.07.2007, objection was raised that the CITES certificate was not enclosed and the payment was not received directly from M/s. Radeep Services, Singapore, which was received from M/s. Kamco Impex Pvt. Ltd. Singapore.
2.1 M/s. Radeep and M/s. Kyoei filed writ petition before the Honble Madras High Court in W.P.No. 26655 of 2007 & 26435/2007 respectively for release of the goods. The Honble Madras High Court by Order dated 9.10.07 in the writ petition of M/s. Kyoei Trading Co. Ltd. Japan, permitted to amendment of the shipping bills and revalidation of the CITES certificate and also permitted to export the goods upon executing a bond and bank guarantee. By order dated 9.10.07 in the writ petition of M/s. Radeep Services, Singapore, the customs authorities were directed to revalidate the CITES petition and also permitted to export the goods upon executing a bank guarantee. Accordingly, APFDC exported these goods upon furnishing a bank guarantee.
2.2 During investigation, it was found that APFDC in earlier occasion as per the Public Notice No. 94/(RE-2005)/2004-2009 dated 27.03.2006, exported to M/s. Koyei vide shipping bills No. 28573311 dated 04.07.06, 2139738 dated 18.07.2006, 2397229 dated 18.07.2006, to the quantity of 462.704 MTs, consignee M/s. Ocean Trading Co. as the buyer. By shipping bill No. 2395917 dated 17.07.06, a quantity of 116.15 MTs was exported to M/s. Radeep and the revised invoices for a lesser quantity of 114.83 MTs were not endorsed in the CITES certificate.
2.3 A Show Cause Notice No. 11/2007- DIU dated 13.11.07 was issued to APFDC relating to exports of Red sanders to M/s. Koyei proposing confiscation of seized consignments and the past consignments and imposition of penalty amongst others. It has also proposed to impose penalty on Shri P.V. Sashidhar, Managing Director, M/s. Andhra Fogaku Pvt. Ltd., (authorized agent of M/s. Kyoei) and Shri G. Nathavel of M/s. Seaways Shipping Ltd. Another Show Cause Notice No. 12/2007 dated 13.11.07 was issued to APFDC relating to exports of Red sanders to M/s. Radeep, for confiscation of seized goods and past consignments and imposition of penalty and also to impose penalty amongst others. It has also proposed to impose penalty on Shri M. Renganathan, (Representative of M/s. Venus Shipping Agency), Shri P. Rakesh Reddy, (Authorized representative of M/s. Radeep Services, Singapore).
2.4. By adjudication order dated 20.11.2009, the Commissioner of Customs (Export-Seaport), Chennai, decided the SCN No. 11/2007 dated 13.11.07 in respect of the export of M/s. Kyoei and confiscated the goods covered under the shipping Bill No. 2731349 dated 21.07.07 under Section 113 (d) and (l) of the Customs Act, 1962, and imposed redemption fine of Rs.60,00,000/- lakhs. He has also confiscated the goods covered under the past three shipping bills as mentioned above and also imposed redemption fine of Rs. 1,50,00,000/-. A penalty of Rs.1,00,00,000/- each was imposed on the Vice Chairman and the Managing Director of APFDC and Shri P.V. Shashidhar of M/s. Andhra Fogaku Pvt. Ltd. under Section 114(i) and 114AA of Customs Act, 1962. He has also imposed a penalty of Rs.10,00,000/- each on Shri G. Nathavel of M/s. Seaways Shipping Limited and on Shri T. Suresh Kumar, clerk of M/s. Andhra Fogaku Pvt. Ltd. under Section 114 (i) and 114AA of Customs Act, 1962.
2.5. By adjudication order dated 23.04.2010, the Commissioner of Customs (Export-Seaport) decided Show Cause Notice relating to export of Red sanders to M/s. Radeep and confiscated the goods covered under Shipping Bill No. 2732255 dated 21.07.2007 under Section 113 (d) & (l) of the Customs Act, 1962 and imposed redemption fine of Rs. 60,00,000/-. He has further confiscated the goods of past consignment under Shipping Bill No. 2395917 dated 17.07.2006 under Section 113 (d) & (l) and imposed redemption fine of Rs. 45,00,000/-. A penalty of Rs. 50,00,000/- each imposed on the chairman and the Managing Director of APFDC and Shri P. Rakesh Reddy, authorized agent of M/s. Radeep Services, Singapore, under Section 114 (i) and 114AA of Customs Act, 1962. He has also imposed penalty of Rs. 10,00,000/- on Shri M. Renganathan of M/s. Venus Shipping Agency under Section 114 (i) and 114AA of the Customs Act, 1962.
3. Shri S.Murugappan, Ld. Advocate appearing on behalf of all the appellants except G. Nathavel, made a preliminary submission that M/s. Kyoei Trading Co. Ltd., Japan, filed appeal No. C/125/2010 before this Tribunal, although no order was passed against them. But, a penalty was imposed on their agent M/s. Andhra Fogaku Pvt. Ltd. The Ld. Advocate submits that M/s. Kyoei Trading Co. Ltd., Japan, filed writ petition No. 26435/07 before the Honble Madras High Court for release of goods and the Honble High Court permitted to export the goods by way of furnishing a bank guarantee. M/s. Kyoei Trading Co. Ltd., Japan, also furnished a bank guarantee in respect of the impugned goods and therefore they are aggrieved party against the impugned order.
3.1 The submissions of the Ld. Advocate in respect of export to M/s. Kyoei Trading Co. Ltd., Japan, are as under:-
(i) There was neither resale of the goods before export nor intermediary or middle man in the said exports.
(ii) M/s. Kyoei entered into an Agreement dated 18.04.2007 with APFDC for purchase of the subject goods. Based on this agreement, purchase order was issued by M/s. Kyoei on 18.04.2007 to APFDC. As per the agreement, advance remittance in full had been received from M/s. Kyoei through Bank of India to the account of APFDC.
(iii) All the shipping Bills have been filed showing the exporter as APFDC and the consignee as M/s. Kyoei Trading Co. Ltd., Japan.
(iv) Shipping Bill No. 2731349 dated 21.07.2007 was amended as per the directions of the Honble High Court and name of the notified party was deleted.
(v) Since, there was no separate provision to mention the consignee name as well as notified party name, the customs clearing agent by mistake mentioned the name of the notified party M/s. Ocean Trading Co., Hong Kong in the shipping bill against the buyer name and address.
(vi) The CITES authorities by letter dated 20.08.2007 clarified that the CITES certificate has been properly issued to APFDC. Thus, there is no violation of any condition of the licence or the Public Notice. However, the Honble High Court of Madras by order dated 9.10.2007 in a writ petition No. 635/2007 has permitted specific amendment and also allowed the exports of the goods. Hence, there is no irregularity.
(vii) With regard to the export of past consignments during 2006, all the shipments were made after due scrutiny of the documents by the customs officers and M/s. Ocean Trading Co. Ltd. was indicated only as notified party in the above documents and they are not the buyers.
(viii) Further, past consignments were exported without any bond or undertaking after the authorities were duly satisfied with the documents produced. In the absence of any undertaking, past shipments cannot be subjected to confiscation and imposition of redemption fine is not justified. In this connection, he relied upon the decision of the Tribunal in the case of M/s. Shiv Kripa Ispat Pvt. Ltd. Vs. CCE, Nasik 2009 (235) ELT 623 (Tri.-LB), to the effect that the goods cannot be confiscated, which are not available. No redemption fine can be imposed, when the goods were allowed to be exported without any undertaking. Even otherwise, that in the case of past exports also buyer is not M/s. Ocean Trading Co. Ltd., which would revealed from the shipping Bill and freight documents. The notified party would refer a person, notified upon arrival of the goods at the port of arrival. It is not necessary that notified party is the buyer. It can be a freight forwarder, intending agent or any bank. In all these cases, consignee is M/s. Koyei and M/s. Ocean Trading Co. Ltd. Hong Kong, was indicated as notified party.
3.2 Regarding exports made to M/s. Radeep Services, Singapore, the Ld. Advocate submits as under:-
(a) The payment was made by M/s. Kamco Impex Pvt. Ltd., Singapore, on behalf of M/s. Radeep Services, Singapore, and the Commissioner has treated this as involving an intermediary. Subsequently, the amount was reimbursed by M/s. Radeep Services, Singapore to M/s. Kamco Impex Pvt. Ltd. In this connection, he refers a letter dated 31.01.08 from M/s. Kamco Impex Pvt. Ltd., Singapore to APFDC, informing that they have received the money and the matter is settled with M/s. Radeep Services. Therefore, there is no intermediary involved in the exports made to M/s. Radeep Services, Singapore.
(b) With regard to the past exports, the initial invoice submitted was for 116.115 MTs. However, after actual weighing and certification by CITES authorities, the actual weight was found to be 114.830 MTs.
(c) Regarding the past exports, the verification of the weight was done and found lesser than the weight indicated in the invoice and it was rectified.
(d) The goods had already been exported and confiscation and imposition of fine are not sustainable. CITES certificate was given to the actual quantity as mentioned in the revised invoice. APFDC is a State Government Undertaking and the appellants Vice Chairman and Managing Directors are Govt. officials. There is no malafide and there is no gain on the part of the appellants. Hence, no penal provision can be invoked against them.
4. On the other hand, the Ld. Authorized Representative on behalf of the Revenue, submits as follows:-
(A) It is apparent on the face of records that the appellants exported the goods to the intermediary, which was detected by Dock Intelligence Unit (DIU) authorities and thereafter, the Honble High Court directed the amendment of shipping bills.
(B) The Honble High Court order has no relevance with the adjudication order proceedings, as the Honble High Court permitted to proceed in the adjudication proceedings.
(C) In the case of M/s. Kyoei Trading Company Ltd., Japan, the goods were exported to M/s. Ocean Trading Co., Hong Kong, and in the case of M/s. Radeep Services, Singapore, the amount was paid by M/s. Kamco Impex Pvt. Ltd., Singapore, who are the third party in this case.
(D) Both Public Notices allowed to export the goods only to two parties as mentioned in the Public Notice. But, in the present case, it is evident from the records that the goods were exported to other company in the case of M/s. Kyoei, the goods would be delivered to M/s. Ocean Trading Company, Hong Kong, and in the case of M/s. Radeep, the amount was given by a third party, which are clear violation of the export licence and public notice and therefore, the adjudicating authority rightly confiscated the goods and imposed redemption fine and penalties.
(E) Regarding the past consignments, the appellants adopted the same practice without the knowledge of the customs authorities. The goods were sent to the destination other than the destination covered under the Public Notice. These facts were not refuted by the appellants at any point of time.
(F) In the case of past exports of M/s. Radeep Services, Singapore, the invoice has been revised after the let-export order was given and the senior officers of the appellant company had counter signed. Thereafter the CITES certificate was endorsed and revalidated.
(G) In the earlier consignments the goods were exported without any signature in the CITES certificate. Relied upon the following decisions of the Honble Supreme Court in the case of T.N. Godavarman Thirumulpad Vs. UOI & Others on 13.02.2012.
5. After hearing both the sides and on perusal of the records, we find that the export of Red sanders is prohibited under the Foreign Trade Policy Schedule II, 2004-2009, as the goods are covered under Appendix-II of CITES, which prohibits trade of red sanders. It is noted that the Ministry of Commerce vide Public Notice No. 94/2006 dated 27.03.2006 and 07/2007 dated 05.06.2007, allowed one time export of the Red sanders to M/s.Kyoei Trading Company, Japan and M/s.Radeep Services, Singapore, with specific conditions to follow the procedure. The relevant portion of the Public Notice 07/2007 is reproduced as under:-
DGFT PUBLIC NOTICE NO-07 (RE: 2007)/2004-2009 dated 05.06.2007 Procedures to be followed for export of Red Sanders in the form of log procured through auction from the Government of Andhra Pradesh In exercise of the powers conferred under paragraph 2.4 of the Foreign Trade Policy 1st September, 2004 31st March, 2009 and consequent to relaxation of condition stipulated in Col. 5 against S.No.154(a) of Chapter 44 in Table B of Schedule 2 of the Book Titled ITC(HS) Classifications of Export and Import Items, 1st September, 2004 31st March, 2009 (as amended from time to time) vide Notification No.7 dated 05.05.2007 the Director General of Foreign Trade hereby prescribes the following procedures to be followed for export of Red Sanders in the form of log procured through auction from the Government of Andhra Pradesh :-
(i) Exporters who obtained Red Sanders Wood in the form of log through auction from the Government of Andhra Pradesh only may apply for grant of export licence.
(ii) The prospective Exporters shall submit their application as per Aayaat Niryaat Form to the DGFT(Headquarters Office), Udyog Bhawan, New Delhi.
(iii) The application shall be accompanied by documents evidencing procurement of Red Sanders Wood in the form of log from the Government of Andhra Pradesh.
(iv) Export shall be made to M/s. Kyoei Trading Company Ltd., Japan and M/s. Radeep Services, Singapore.
(v) One time exemption will be applicable for a period of 1 month from the date of issue of export licence.
(vi) No re-sale of the Red Sanders logs will be permitted to anybody under any circumstances.
(vii) There must not be any intermediary or middle man and entire disposal of the material must be under the proper and strict supervision of the officers of the Forest Department only.
(viii) The State Government should not call for any such tender for the export of Red Sanders Wood in log form in future which is not permitted under the EXIM Policy, to avoid such situations.
(ix) This permission is subject to necessary clearance under CITES as per rule and procedure as Red Sanders is in Appendix-II of CITES.
2. Application received within the stipulated period would be considered by the Export Facilitation Committee on merit for issue of Export Licences for export of said items and shall be subject to any other condition, so imposed.
3. This issues in the Public interest.
6. The Ministry of Environment and Forest by their letter dated 05.04.2007, addressed to the Special Chief Secretary, Department of Environment, Forests Science & Technology, Andhra Pradesh Secretariat, Hyderabad, Andhra Pradesh, directed to allow the State Government of Andhra Pradesh to export 354.98 MT of Red Sanders Wood in the log form to the two International Companies ie. M/s.Kyoei Trading Company, Japan and M/s. Radeep Services, Singapore, as a special case under the following condition:
There must not be any intermediary or middle man and the entire disposal of the material must be under the proper and strict supervision of the officers of the Forest Department only.
7. The Director General of Foreign Trade issued licences in respect of export of Red sanders wood in log form. In this context, we find that the licences would indicate that M/s. Andhra Pradesh Forest Development Corporation Ltd., is authorized to export Red sanders to M/s. M/s.Kyoei Trading Company, Japan and M/s. Radeep Services, Singapore and the destination of export as all permissible destinations. The licences were issued subject to fulfillment of all the conditions specified in Public Notice and subject to necessary clearance under CITES.
8. M/s. APFDC entered into an Agreement with both the companies for supply of Red sanders as per the said Public Notices. The agreement stipulates the conditions amongst others are as under:-
i) There must not be any intermediary or middle men and entire disposal of the material under strict supervision of the officers of the Forest Department only;
ii) The necessary license for the export must be obtained from GOI as per rules and procedure under EXIM policy;
iii) No resale of the RS Wood logs will be permitted to any body under any circumstances;
iv) The above clearance is valid for a period of one month only from the date of issue of license by DGFT, New Delhi;
v) The permission is subject to necessary clearance under CITES as per procedure as Red Sanders is in Appendix-II of the CITES.
9. Both the Companies issued purchase orders to APFDC. The purchase orders indicate that the shipment details and destination would be Shanghai, Hongkong, Tokyo in the case of M/s.Kyoei Trading Company, Japan and the shipment details and destination would be Singapore, Hongkong, Malaysia in the case of M/s. Radeep Services, Singapore. The supply of Red sanders to M/s. Kyoei Trading Company, the adjudicating authority observed that the Public Notice permitted one time export of Red sanders by APFDC to both the companies. The conditions mandated that the Red sanders in log form should not be resold any intermediary in the transactions and should have CITES clearance. It is observed that the goods were sent to M/s. Ocean Trading Company, Hong Kong, an intermediary contrary to the specific condition as mentioned in the Public Notice. It is also noted that on earlier occasions, the appellants supplied the same material under Public Notice No. 94/2006 dated 27.03.2006, to M/s. Ocean Trading Company, Hong Kong and not to the consignees as specified in the said Public Notice. The export of these goods to Hong Kong and the Bill of Lading showed the buyer as M/s. Ocean Trading Company, Hong Kong, which are contrary to Public Notice.
10. In the case of export to Radeep Services, Singapore, the adjudicating authority observed that the payment of the export goods had not been made by M/s. Radeep Services, but on behalf of M/s. Radeep Services, a middle man involved viz., M/s. Kamco Impex Pvt. Ltd., Singapore. Inspection report given by the CITES authorities and DGFT licence were not produced to the proper officer.
11. The Ld. Advocate on behalf of the applicants strongly relied upon the decision of the Honble Madras High Court. He drew the attention of the Bench, the relevant portion of the judgment dated 09.10.2007 in W.P.No. 26435 of 2007 & M.P. Nos. 1 and 3 of 2007 in the case of M/s. Kyoei Trading Co. Ltd Vs. CC and others. It is stated that the Honble High Court directed the CITES authorities to extend the period of validity of their certificate for eight weeks. After revalidation of the CITES certificate, the appellant was directed to report to the customs authorizes to enable the department to pass order on the application for amendment of shipping bills. After incorporation of the same, it is directed to permit the appellants to export Red sanders wood forthwith without any further delay after necessary bank guarantee.
12. M/s. Radeep Services filed a writ petition and by Order dated 09.10.2007 in W.P.No. 26435 of 2007 & M.P. Nos. 1 and 3 of 2007, the Honble High Court directed the respondents to permit the appellants to export the goods by executing a bond for the amount representing the redemption fine and penalty etc. It was also directed the appellants to file necessary application to the respondent Commissioner to amend the shipping bills and to pass order amending the shipping bills. The Ld. Advocate particularly drew the attention of the Bench to the relevant portion of the said order.
7. For export of Red Sanders Wood, the permission of the Ministry of Environment, the Director General of Foreign Trade and Ministry of Commerce of the Central Government and CITES certificate are require, which were duly complied with by the petitioners and the respondent Nos.4 to 6. Of course there is a typographical error found in the Shipping Bill wherein instead of mentioning the name of the consignee, his agents name and address was wrongly typed, which is probably the reason for initiating action on the part of the respondent Nos. 1 to 3, which resulted in stopping of the export. The said reason cannot be a valid reason to prevent the export, as the petitioner and the respondent Nos. 4 to 6 have duly complied with the other legal requirements for export.
8. The learned Additional Solicitor General as well as Assistant Solicitor General pointed out that if the petitioner is prepared for the export of Goods to Tokyo instead of Hong Kong, their claim can be considered by the Court. This Court is of the view that both the Governments, namely the Union as well as the State Government besides the CITES gave permission to take the Red Sanders Wood to Hong Kong and therefore, it is unnecessary for the respondent Nos. 1 to 3 to insist the petitioner to take it to Tokyo, hence, the said request for the respondent Nos. 1 to 3 is untenable in law.
The CITES authorities are directed to revalidate the Certificates issued by them to the petitioners for a period of four weeks from today without insisting for renewal/extension of license from DGFT/R5 herein.
13. The main contention of the Ld. Advocate is that the Honble High Court of Madras has already observed that there is typographical mistake in the Shipping Bills by mentioning the name of the consignee as M/s. Ocean Trading Company, Hong Kong instead of M/s. Kyoei Trading Co. Ltd. The Ld. Advocate submits that since the goods were properly exported, confiscation and penalty are not sustainable. It is also contended that the goods were supplied only to M/s.Kyoei Trading Company, Japan and M/s.Radeep Services, Singapore and the name of M/s. Ocean Trading Company in the shipping bills for intimating the arrival of the goods to the intended buyers.
14. We find that the Public Notice categorically imposed the condition that the export shall be made only to M/s.Kyoei Trading Company, Japan and M/s.Radeep Services, Singapore. It is also stated that no resale of the goods permitted to nobody in any circumstances. Public Notice categorically mentioned that there must not be any intermediary and middle man. On plain reading of the Public Notice, it is clearly apparent that goods will be exported directly to both the companies and no intermediary or middle men would be allowed to enter into the transaction. We have noticed that there is no mention of name of M/s. Ocean Trading Company in the purchase order and the agreement between the parties. The word intermediary means an agent. The licences allowed to export to permissible destinations. So, the licences were issued to export Red sanders to both the companies in their permissible destination. There is restriction that the goods cannot be exported to the agent. In view of that, we do not find any force in the submission of the Ld. Advocate. It is seen that the name of M/s. Ocean Trading Company was mentioned at the time of the export of the goods in the invoices and shipping bills. This practice was followed by the APFDC in the past exports and such irregularity cannot be accepted lightly. They have not placed any material to substantiate their contention.
15. The other aspect of the matter is that in both the cases there is irregularity in so far as CITES certificates were not valid at the time of export of the subject goods which was revalidated by the order of the Honble High Court. Thus, it is clearly established that the appellants exported the goods in violation of the condition of the Public Notice as well as licences and therefore, confiscation of goods under Section 113(d) & (l) of the Customs Act, 1962. The DIU officers detected the violation of the Public Notice and the licences. The Honble High Court had directed to process adjudication proceedings and the Honble Court also directed to furnish bank guarantee in respect of redemption fine and penalty. So, we do not find any merit in the submission of the Ld. Advocate.
16. We find from the impugned order dated 20.11.2009, Shri T. Appi Reddy, Deputy General Manager of M/s. Andhra Pradesh Forest Development Corporation Limited, in his statement stated that he was the authorized signatory for export formalities. ShriP.V.Shashidhar of M/s. Andhra Fogaku Pvt. Ltd., had requested the APFDCL to include the name of M/s. Ocean Trading Company, Hong Kong as the notified party. It is also stated that there was no reference of M/s. Ocean Trading Company, Hong Kong in any of the records of purchase order, agreement or in any of the documents submitted to Director General of Foreign Trade, New Delhi, which were first time included in the invoice and the shipping documents. The name of M/s. Ocean Trading Company was suggested by the consignee M/s. Kyoei Trading Company, Japan, through his agent M/s. Andhra Fogaku Pvt. Ltd. He further stated that the invoice was approved by the Vice Chairman & Managing Director of APFDC.
17. Shri P.V. Shashidhar, Managing Director, M/s. Andhra Fogaku Pvt. Ltd. in his statement dated 17.08.2007 stated that he was the authorized agent in India for M/s. Ocean Trading Company, Hong Kong. In view of the above statements and after considering the evidences, we are of the view that the inclusion of the name of M/s. Ocean Trading Company, in the invoices and in the shipping bills are a clear violation of the Public Notice and licences. It is noted that the appellants in earlier three consignments had exported in the same line. However, the earlier consignments were not available and has already exported and therefore confiscation and imposition of fine on earlier consignments are not justified. The Larger Bench of the Tribunal in the case of M/s. Shiv Kripa Ispat Pvt. Ltd. Vs. CCE, Nasik 2009 (235) ELT 623 (Tri.-LB), had held that the goods cannot be confiscated when not available and redemption fine would not be imposable.
18. In the case of export of M/s. Radeep Services, the main allegation is that the remittance was made by M/s. Kamco Pvt. Ltd. After detention of the goods, by letter dated 31.01.2008, M/s. Kamco Pvt. Ltd. has informed that they have received the full amount with interest from M/s. Radeep Services, Singapore and they do not have any claim or rights over the goods. So, it is clearly evident that third party was involved in the transaction, which is contrary to the condition of Licence and Public Notice and therefore confiscation and imposition of redemption fine and penalties are justified.
19. We agree with the findings of the adjudicating authority that the Vice Chairman and the Managing Director of the appellants are responsible for such irregularity and the CITES inspection report was given by the CITES authority only after 31.07.2007, which was not provided along with the Shipping Bill, which is also a clear violation against the Public Notice and the condition of licences. They cannot absolve their responsibility and liability for violation of conditions of Public Notice and Licences. Therefore, penalty on the Chairman and the Managing Director of APFDC and Shri P.V Shashidhar, Managing Director, M/s. Andhra Fogaku Pvt. Ltd. are warranted. The Ld. Advocate submits that without prejudice, amount of redemption fine and penalty are excessive.
20. Regarding the appeal filed by M/s. Kyoei Trading Co. Ltd., we find that they have not intervened during the adjudication proceedings at any stage and therefore, the appeal filed by M/s. Kyeoi Trading Co. Ltd. is not maintainable before this Tribunal.
21. Shri T. Suresh Kumar, an employee of M/s. Andhra Fogaku Pvt. Ltd., Hyderabad, had acted on the basis of the direction of Shri P.V. Shashidhar of M/s. Andhra Fogaku Pvt. Ltd., Hyderabad. Shri G. Nathavel, of M/s. Seaways Shipping Limited, Chennai, and Shri M. Renganthan of M/s. Venus Shipping Agency, both CHA filed documents as supplied by the APFDC. Shri P. Rakesh Reddy, authorized agent of M/s. Radeep Services, Singapore, filed documents as per the direction of M/s. Radeep. There is no material available that they had directly involved in the irregularity. So, in our considered view, no penalty would be warranted on Shri T. Suresh Kumar, Shri G. Nathavel, Shri M. Renganathan and Shri P. Rakesh Reddy.
22. After considering the overall facts and circumstances of the case, we modify both the adjudication orders.
(a) Appeal against the adjudication order No. 10090/09 dated 20.11.10, is modified as under as under:-
i) Redemption fine in respect of Shipping Bill No. 2731349 dated 21.07.07 is reduced to Rs. 30,00,000/- (Rupees Thirty lakhs)
ii) Confiscation and imposition of redemption fine in respect of earlier three shipping bills are set aside.
iii) Penalties imposed on the Vice-Chairman and Managing Director of M/s. APFDC is reduced to Rs.5,00,000/- (Rupees Five lakhs).
iv) Penalty imposed on Shri P.V. Shashidar is reduced to Rs. 10,00,000/- (Rupees Ten lakhs)
v) Penalty on Shri G. Nathavel and Shri Suresh Kumar are set aside.
vi) The appeal filed by M/s. Kyoei Trading Co. is dismissed as non-maintainable.
b. Appeal against the Order No. 11906/2010 dated 23.04.2010, is modified as under:-
i) Confiscation and redemption fine against the shipping bill No. 2732255 dated 21.07.07 is reduced to Rs.30,00,000/- lakhs.
ii) Confiscation and redemption fine against the past consignments are set aside.
iii) Penalty imposed on the Chairman and the Managing Director of M/s. APFDC is reduced to Rs.2,50,000/- (Rupees Two lakhs and Fifty Thousand only)
iv) Penalty on Shri P. Rakesh Reddy and Shri M. Ranganathan are set aside.
(Order pronounced and dictated in the open Court) (R. PERIASAMI) (P.K. DAS) TECHNICAL MEMBER JUDICIAL MEMBER BB 2