Custom, Excise & Service Tax Tribunal
Sindhu Cargo Services Ltd vs Cc Coimbatore on 13 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/PD/257/07 & C/389/2007
[Arising out of Order-in-Appeal No.12/2007-Cus. dated 24.10.2007 passed by the Commissioner of Customs (Appeals) Coimbatore]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
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 Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Sindhu Cargo Services Ltd.
Appellant/s
Versus
CC Coimbatore
Respondent/s
Appearance:
Shri S.Murugappan, Advocate Shri M.K.A.K.Mohiddin, JDR For the Appellant/s For the Respondent/s CORAM:
Mr. P.G.Chacko, Member (Judicial) Date of hearing : 13.2.2008 Date of decision : 13.2.2008 Final Order No.____________ After examining the records and hearing both sides, I find that appeal itself can be finally disposed of at this stage. Accordingly, after dispensing with predeposit, I take up the appeal.
2. The appellants qua Customs House Agent for M/s.Arul Baghya Textiles (Exporter) had filed a Shipping Bill dated 20.8.2005 for export of readymade garments (100% Cotton Knitted Polo Shirt for Men) to UAE. The declared value of the goods was Rs.5,27,483/- @ US$ 6.5 per shirt. The export was under claim for drawback. The officers of Customs, having developed doubts regarding the quality of the goods, got it examined for GSM and on the basis of the results of examination as well as the results of market enquiry, they estimated the value of the shirts at US$ 5.54 per piece. On this basis, the goods were alleged to have been overvalued for the purpose of undue drawback. After recording statements from the exporter and their CHA and completing the enquiries, the department issued a show-cause notice proposing to revise the value of the goods as above, confiscate the goods under Section 113 of the Customs Act on the ground of misdeclaration of value and impose penalties. While the penalty proposed on the exporter was under Section 114 of the Act, the one proposed on the CHA was under Sections 114 & 117 of the Act. These proposals were contested. In adjudication of the dispute, the original authority imposed a penalty of Rs.10,000/- on the CHA under Sections 114 and 117, apart from confiscation of the goods under Section 113 of the Act. This decision was upheld by the Commissioner (Appeals). Hence the present appeal of the CHA.
3. It is submitted by ld.counsel for the appellants that penalty imposed on them is beyond the scope of both Sections 114 & 117 of the Customs Act. It is submitted that, for a penalty under Section 114, it must be found on the basis of evidence that the CHA, by their commission or omission, abetted the exporters alleged offence of misdeclaration of value of the goods thereby rendering the goods liable to confiscation under Section 113. In this case, it is submitted, there is no evidence of the CHA having acted in aid of over invoicing of the goods. Their job was to verify the correctness of the declared value and other particulars with reference to the relevant invoices, and this was, admittedly, done. It was beyond the scope of the CHAs function to enquire as to whether the invoiced price of the goods was higher than the prevailing market value. Therefore, there can be no finding that the CHA rendered the goods liable to confiscation under Section 113 by abetting over invoicing of the goods. In this context, it is submitted by ld.counsel that the decision of this Tribunal in World Cargo Movers Vs Commissioner, 2002 (139) ELT 408 (Tri.-Del.) is squarely applicable to the facts of this case. Ld.counsel has also relied on the Tribunals decision in Vetri Impex Vs Commissioner, 2004 (172) ELT 347 (Tri.-Chennai). He has also claimed support from this decision to his contention that the residuary provisions of Section 117 are not applicable to the instant case. Ld.JDR has reiterated the findings of the lower appellate authority.
4. After considering the submissions, I have found that the issue arising in this case is already covered by the cited decision of the Tribunal. The Revenue has no case that the CHA was also a party to the alleged misdeclaration of value of the goods. Their function was to verify the correctness of the particulars mentioned in the Shipping Bill and the declarations attached thereto. This scrutiny was done by them with reference to the particulars borne on the relevant invoices. It is settled law that the CHAs function, in so far as the declared particulars in Shipping Bill are concerned, does not extend beyond this point. There is no evidence, on record, of the CHA having abetted the alleged offences of the exporter. In the circumstances, there is no reason to invoke Section 114 against them. As rightly pointed out by ld.counsel and as held in the case of Vetri Impex (supra), it is not open to the department to invoke Section 117 of the Act (being a residuary penal provision) inasmuch as the provisions of Section 114 were already invoked. In other words, both the provisions cannot operate together in a given case.
5. In the result, the impugned order is set aside insofar as this appellant is concerned and their appeal is allowed.
(Dictated and pronounced in open court) (P.G.CHACKO) MEMBER (J) gs 5 2