Customs, Excise and Gold Tribunal - Mumbai
Somaiya Shipping Clearing Pvt. Ltd., ... vs Commissioner Of Central Excise on 2 December, 2005
Equivalent citations: 2006(105)ECC372, 2006ECR372(TRI.-MUMBAI), 2006(197)ELT552(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. All the four appeals are being disposed off by the commissioner's order as they arise out of the same impugned order of the Commissioner of central Excise & Customs vide which he has confiscated the goods meant for export with an option to the appellant to redeem the same on payment of redemption file of Rs. 1 Lakhs and imposed personal penalty of Rs. 50,000/-on each of the appellant under provisions of Section 114 of the Customs Act, 1962.
2. As per facts on record M/s. Sunday Exports Limited filed shipping bills along with the relevant documents for export for consignment of 51 cartons. On examination, cartons No. 1 to 26 were found to be as per declaration. However, the goods in cartoon No. 27 to 51 were found to be old, used and in torn condition. Investigation were conducted and statements of various persons including the Director of Sunday Exports Ltd and Director of Customs Housing Agent Shri. Kanti Somaiya was recorded.
3. Based upon the above facts, proceedings were initiated against all the appellants for confiscation of the goods as also for imposition of penalty. In adjudication, commissioner found that as carton No. 1-26 contained declaration goods, the same are liable to be released. He ordered accordingly. However, in respect of the balance 25 cartoons, he rejected the appellants contention that there was a bonafide mistake of mixing of cartons in the factory itself as an afterthought and confiscated the same.
4. Before us, it has not been contested that 25 cartons, contained old, used and torn goods. However the same plea of mix up has been reiterated. It has also been contended that their foreign buyers has agreed to buy the rejected goods at a lower price to be determined after the receipt of the goods on their own, and as such they be permitted to allow the export after making necessary changes in the shipping documents.
5. Shipping and clearing agent M/s. Somaiya has contended that there is no evidence on record to show that they were party to such misdeclaration. Shipping bills was filed along with the other documents as per the information received by them from the exporter. As such, imposition of penalty upon them is not justified. In any case, it has been strongly contended that imposition of separate penalty on the director as also on the clearing House Agent is not justified.
6. After hearing Ld. DR, we find that the declaration in respect of part of the exported goods was found to be false, on examination of the cartons. This has not been contested by the exporter. The plea of mix up of the goods at the factory was not disclosed by the Director in his initial statement. As such, we are of the view that the same has been rightly rejected by the adjudicating authority as an afterthought. Accordingly, the confiscation of the 25 cartons with redemption fine of Rs. 1 Lakh is upheld.
7. In the facts and circumstances of the case, we reduce the personal penalty of Rs. 50,000/- imposed on Sunday Exports Ltd. to Rs. 25,000/-, which already stands deposited by them in terms of the stay order. We do not find any valid reason for imposition of separate penalty on the Director of Sunday Exports Ltd. Similarly there is nothing in the impugned order of the commissioner to justify imposition of penalty on the clearing agent. Tribunal in the case of P.S. Bedi & Co. v. CC, New Delhi has held that in the absence of any incriminating evidence against the custom house agent while filing the Bill of Entry on the basis of records made available by the importer, no penalty can be imposed under provisions of Customs Act. In view of above, we set aside the impugned order imposing penalty upon the all other three appellants.
8. In a nutshell, the confiscation of goods is upheld, penalty on M/s. Sunday Exports is reduced to Rs. 25,000/- and the penalty on the other three appellants is set aside. All the appeals are disposed off in above manner.
C. Satapathy, Member (T) While I agree to upholding confiscation of the goods as proposed in the order recorded above, I am unable to agree to the reduction in penalty and setting aside of the penalties as proposed. This is a case where the appellants were caught making bogus export towards fulfillment of export obligation under 100% E.O.U. Scheme. Many of such bogus exports go undetected causing a drain on Public Revenue. It is my considered view that in respect of the few cases which are detected, no leniency is required to be shown. I am of the view that the penalties imposed in this case are already on the lower side considering the extent of bogus export attempted and hence the same need confirmation. I order accordingly.
The following difference of opinion is placed before the Hon'ble President in terms of Section 129C(5) of the Customs Act, 1962:
Whether the penalty on M/s Sunday Exports is required to be reduced to Rs. 25,000/- and the penalties on the other three appellants are required to be set aside as held by the Member (Judicial) OR The penalty imposed on all the appellants have to be confirmed as held by the Member (Technical).
Jyoti Balasundaram, Vice President
1. I have heard both sides on the difference of opinion referred to me.
2. As regards the CHA and its Director, there is no ground for imposition of penalty, as CHA has filed Bill of Entry showing the description and value on the basis of the records made available by the Exporter and there is no evidence of knowledge on the part of the CHA that there was mis-declaration of description and value of the goods. Although the Ld. SDR seeks to justify the penalty on the CHA on the ground that they did not produce authorization letter from the Exporter to clear the goods and therefore, penal action on CHA is required to be sustained, I find that the penalty has been imposed on CHA only for the failure in their obligation to file the documents with correct description and value of the goods. Further, penalty under Section 114 cannot be imposed on the ground that CHA failed to file authorization letter. I, therefore, concur with view expressed by the Ld. Member (Judicial) that penal action against the CHA and its Director is not sustainable.
3. Penalty on Director of the Exporter is sustainable, as it is rightly pointed out by the Ld. SDR that he has signed on all copies of ARB-1 and he also admitted that the export goods were manufactured out of rejected and soiled material and cannot escape from liability to penalty by taking shelter under the argument that everything was done by his clerk. I, therefore, agree with the view expressed by the Ld. Member (Technical) that the Director of the Exporter is liable to penalty of Rs. 50,000/- (Rupees Fifty thousand only) imposed by the Commissioner. I also agree with the order recorded by the Ld. Member (Technical) in so far as it relates to reduction of penalty of Rs. 50,000/- Rupees Fifty thousand only) on the Exporter, as the value of the goods mis-declared is approximately Rs. 8,00,000/-(Rupees Eight lacs only) and no grounds have been made for reduction.
4. In the result, I concur with the view expressed by the Ld. Member (Judicial) regarding setting aside the penalty on the CHA and its Director, and concur with the view expressed by the Ld. Member (Technical) on imposition of penalty of Rs. 50,000/- (Rupees Fifty thousand only) on the Exporter and its Director.
5. The file is returned to the original Bench for further orders.
MAJORITY ORDER In view of the majority decision, appeals of M/s. Sunday Exports and Shri R.I. Gandhi are rejected and the appeals filed by M/s. Somaiya Shipping Clearing Pvt Ltd., and Shrikant Somaiya are allowed.