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of <h1>Appellate court upholds penalties for exporting stainless steel wire rods without required documentation</h1> <h3>Albatross Shipping Ltd, Mukand Limited and Vishal Shipping Agencies Pvt Ltd Versus Commissioner of Customs (Export) Nhava Sheva</h3> The appellate court upheld the order-in-appeal for exporting stainless steel wire rods without a 'let export order,' leading to confiscation and penalties ... ‘Let export order’ - The container of stainless steel was loaded on the vessel MV Sima Touba on 1st September 2006 which sailed on the 2nd September 2006 whereas ‘let export order’ for the shipping bill was granted only on the 4th September 2006 - confiscation of goods with imposition of penalties - Held that: - any deviation in prescription relating to control over goods and conveyances before export or, in case of imports, till clearance for home consumption is not merely procedure. Nevertheless, the facts and circumstances of each case needs to examined before resorting to confiscation and penalty. The systems are engineered to account for legal responsibility for cargo under international conventions. It is in the interests of the custodian and ‘person-in-charge’ of the conveyance to ensure that all documentation is complete before handing over and taking over of containers. That such did not occur is more likely to be attributable to inadvertence. Nor can any motive be ascribed as containerized cargo are not, in the holding area or aboard the vessel, susceptible to ingress. The law itself mandates confiscation and penal action for such mis-adventure and, as long as the law remains on the statute book, it must be enforced. The imposition of penalty on the person incharge of the conveyance and, vicariously, therefore on the shipping agent cannot be faulted. However, considering the circumstances, the high penalty imposed in the original order and confirmed in the impugned order appears to be overkill. Accordingly, the penalty on M/s Albatross Shipping Ltd is reduced to ₹ 3,00,000. Penalty on the other two appellants are set aside - appeal disposed off - decided partly in favor of appellant. Issues:Appeal against common order-in-appeal for export of stainless steel wire rods without 'let export order'; Confiscation and penalties imposed on exporter, custom house agent, and shipping company; Examination of export consignments and issuance of 'let export order'; Responsibility of various parties in export process; Confiscation and penalties under Customs Act, 1962; Applicability of law in the era of containerization; Reduction of penalty on shipping company.Detailed Analysis:1. Violation of 'Let Export Order' Requirement:The judgment pertains to appeals filed against an order-in-appeal for exporting stainless steel wire rods without a 'let export order.' The exporter, custom house agent, and shipping company faced confiscation and penalties due to this violation. The original authority held the goods liable for confiscation and imposed significant penalties on all three parties involved.2. Contentions and Legal Precedents:The exporting company argued that they were not involved in the contravention as the examination and sealing of the container were done before it passed into the holding area. Legal precedents from previous cases were cited to support their argument, emphasizing that the exporter should not be penalized for such procedural lapses.3. Responsibilities in Export Process:The responsibility of the exporter and agent ceases upon the completion of examination, and the issuance of the 'let export order' is the duty of the proper officer. The loading of export goods without permission renders them liable for confiscation under the Customs Act, 1962. The judgment highlights the chain of responsibilities in the export process and the legal consequences of non-compliance.4. Application of Law in Containerization Era:The judgment acknowledges the challenges posed by mechanized systems in ports for ensuring compliance before loading. It discusses the evolution of procedures in the era of containerization and emphasizes the legal obligations of custodians and conveyance personnel in ensuring proper documentation and loading procedures.5. Reduction of Penalty:While upholding the imposition of penalties on the shipping agent and shipping company, the judgment deems the original high penalty as disproportionate. Consequently, the penalty on the shipping company is reduced, considering the circumstances of the case. The penalties on the other two appellants are set aside, indicating a nuanced approach to penalty imposition based on the specific facts of the case.6. Conclusion:The judgment concludes by disposing of the appeals, reflecting a balanced consideration of the legal obligations, procedural lapses, and mitigating factors in the export process. It underscores the need for enforcement of the law while also recognizing the practical challenges and inadvertent errors that can occur in the complex landscape of international trade and containerized cargo operations.
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