Custom, Excise & Service Tax Tribunal
M/S. N. Karim & Sons vs Commissioner Of Customs (Export), ... on 22 October, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. C/606, 649 and 716/08 - Mum
(Arising out of Order-in-Original No. 75-08/Adj/(X) dated 27.3.2008 passed by the Commissioner of Customs (Export), Nhava Sheva).
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 :
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. N. Karim & Sons
:
Appellants
M/s. Orchid Shipping Pvt. Ltd.
M/s. Allanasons Ltd.
Versus
Commissioner of Customs (Export), Nhava Sheva
Respondents
Appearance Shri Anil Balani, Advocate for Appellant No.1 Shri. N.P. Jagasia, Advocate for Appellant No.2 Shri N.A. Sayeed, JDR for Respondents CORAM:
Honble Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 22.10.09 Date of Decision : 22.10.09 ORDER NO.
Per : Ashok Jindal These appeals are filed by M/s. Allanasons Ltd., the Exporter against the imposition of redemption fine of Rs.5,00,000/- under Section 125 and imposition of penalty of Rs.2,50,000/- under Section 114 (iii), M/s. N. Karim & Sons, the CHA against the imposition of penalty of Rs.5,00,000/- under Section 114 (iii) and M/s. Orchid Shipping Pvt. Ltd., the Shipping Line, against the imposition of penalty of Rs.7,00,000/- under Section 114(iii) of Customs Act, 1962.
2. Brief facts of the case are that the exporter, exported three containers which were examined and sealed by the Central Excise Department and the said containers were gated in JN Port on 30.12.2006. Those containers were although gated in on 30.12.2006 but the exporter could not file the Shipping Bill on 31.12.2006 and 01.01.2007 being holiday. Due to change in the EDI system, the Shipping Bill were to be generated only against PAN Card and the CHA could not file the Shipping Bill. On 03.01.2007 the CHA filed the Shipping Bill and obtained the LEO on 4.1.07 but before obtaining the LEO the said containers were loaded on the vessel on 03.01.2007 and the vessel sailed on the same day without the LEO from the proper officer of the Customs. For that contravention, redemption fine and penalty was imposed on the exporter and penalties on the CHA and the Shipping Line.
3. Heard both sides and perused the submissions.
4. Shri. Anil Balani, learned Advocate for the CHA, during the course of argument submitted that while granting stay, this Tribunal has observed that there is no evidence brought out by the Revenue to show that loading of the goods on the vessel was with the connivance of CHA or on their asking. There is no evidence to show that they have colluded with the shipping line and have an ulterior motive or intention. Once the goods have been entered in the port area and are in the custody of the custodian, the exporter has no control over the same. The CHA has carried out all the formalities of getting the shipping bills processed and obtaining the LEO. No irregularity has been found in this regard. Since the goods were in the custody of the custodian, the exporter and the CHA have no control over its loading in the vessel and there is no evidence also that they were present at the time of loading of the goods in the vessel. He further contended that the CHA was not in the knowledge when the goods were loaded and when the vessel was sailed. In fact on 03.01.2007 the CHA informed the Shipping Line that the Shipping Bill and the LEO shall be obtained by tomorrow but the Shipping Line has loaded the container on the vessel on 03.01.2007 without any knowledge to the CHA. He further submitted that the Department has not brought any evidence on record to establish that the CHA or the Exporter were in the knowledge of loading of the containers and the sailing of the vessel on 03.01.2007. He further submitted that the goods have already been exported and the goods are not available and are not exported under any bond, the redemption fine on the Exporter cannot be imposed. To support this contention he placed reliance on Shiv Kripa Ispat Pvt. Ltd. vs. CCE & Cus, Nasik 2009 (235) ELT 623 (Tri. LB) wherein it was held that Goods cannot be confiscated when not available and redemption fine is not imposable.
5. Shri. N.P.Jagasia, learned Advocate appearing on behalf of the Shipping Line submitted that due to programmed well in advance of the sailing of the vessel on 03.01.2007, the containers were loaded on the vessel in the presence of Proper Officer of Customs and admitted that the CHA has informed to the Shipping Line that the documents i.e. Shipping Bill and the LEO shall be submitted by tomorrow i.e. 04.01.2007 but due to error they have loaded the container on the vessel and it is only a technical error and the same can be rectified under Section 42(2) (f) on being asked by the proper officer of the Customs. He further submitted that it is only a technical error and for such fault, heavy penalty may not be imposed. He further prayed that while considering the issue, lenient view be taken against the shipping line.
6. On the other hand Shri. N.A. Sayeed, learned JDR appearing on behalf of the Revenue submitted that it is an admitted fact that the containers were loaded on the vessel without obtaining the LEO and it was in the knowledge of the CHA and the Exporter also. The vessel has to be sailed on 03.01.2007 and containers being loaded on the vessel on 03.01.2007 hence the Exporter, the CHA and the Shipping Line are all liable for the penalties. To support his contention he placed reliance in the case of LMJ International Ltd. vs. CC (Export), Nhava Sheva 2008 (224) ELT 91 (Tri. Mum.), Tribunals Order No. A/404-405/09/SMB/C-IV dated 29.07.09 of M/s. Sudarshan Cargo Pvt. Ltd. and Ors. in Appeal No. C/1014, 1084/08, M/s. Kusters Calico Machinery Ltd. and Ors. in Appeal No. C/419, 420, 530/08 vide Order No. A/310-312/2009/SMB/C-IV and Nichrome India Ltd. Ors. in Appeal No. C/650, 809 and 1057/08 vide Order No. A/429-431/2009/SMB IV dated 30.07.2009. He further submitted that in all the referred cases this Tribunal has held in similar facts, the Exporter, CHA and the Shipping Line are at fault for loading the containers without obtaining the LEO and penalties were confirmed against the Exporter, CHA and the Shipping Line. He further contended that the adjudicating authority has rightly imposed the penalty and prayed that the impugned order be confirmed.
7. On careful examination of the submissions made by both the parties and perusal of the records, I find that it is an admitted fact that the containers loaded on the vessel without obtaining LEO on 03.01.2007 and the vessels sailed on the same day. Section 34 of the Customs Act, 1962 deals with the loading of the container on the vessel, which is reproduced here as under:-
Section 34. Goods not to be unloaded or loaded except under supervision of customs officer. Imported goods shall not be unloaded from and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer:
As per Section 34 of the Customs Act, 1962 the goods shall not be loaded except under the supervision of the proper officer. It is not clarified by the learned JDR how the containers were allowed to be loaded on the vessel without Shipping Bill and the LEO. Further more as per paragraph 11 of the impugned order wherein the shipping line has admitted that they were informed by the CHA that the Shipping Bills were processed at Custom House and would be delivered by tomorrow i.e. on 04.01.2007 and on 04.01.2007 the LEO was obtained.
8. I have also gone through the Judgements filed by the learned JDR in support of his contention but I find that the facts of all the citations are distinguishly from the facts of this case as none of those cases CHA or the exporter failed to inform shipping line not to load the container on the vessel as the documents are not ready to deliver to the shipping line but in this case the shipping line was informed by the CHA that the documents shall be available only on 04.01.07. In this view, I do not find any fault with the exporter and the CHA. Accordingly, the penalties imposed on the Exporter and the CHA are waived of.
9. With regard to the redemption fine imposed on the Exporter, I find that the goods are not physically available and are not being exported under any bond, the goods cannot be confiscated. Following the ratio of the judgement in the case of Shiv Kripa Ispat Pvt. Ltd. (supra) the redemption fine is also not imposable.
10. With regard to the Shipping Line, I find that the Shipping Line has loaded the containers on the vessel without obtaining the LEO which is in contravention of Customs Law for such act they are liable for the penal action but in the case of CSAV Group Agencies (India) Pvt. Ltd. vs. Union of India & ors. in Customs Appeal No. 57 of 2009 dated 15th July, 2009 the Honble High Court of Bombay in similar facts and circumstances, considering the case as technical breach and the penalties imposed on the Shipping Line were reduced to 40%. Following the same ratio, I reduce the penalty to 40% i.e. Rs.2,80,000/- on the Shipping Line.
11. With these findings, the appeals are disposed of.
(Pronounced in Court) (Ashok Jindal) Member (Judicial) nsk 6