2013 (7) TMI 80 - AT - Customs

Customs Act Violation Penalties: Appellants' Appeals Disposed, Penalties Varied

M/s VENKATESH AGENCIES & OTH. Versus COMMISSIONER OF CUSTOMS (EXPORT), NHAVA SHEVA

Penalties under Section 114(iii) of the Customs Act were imposed on three appellants for loading goods without a Let export order. The court found that ... Penalty under Section 114(iii) of the Customs Act imposed - consignment was loaded on the vessel and vessel was sailed on 26.1.2007 without obtaining Let export order - Held that:- After going to the port area, the CHA exporter have no control over the goods as held by the Tribunal in the case of N. Karim & Sons. Therefore, the appellant namely M/s. Falcon International and M/s Venkatesh Agencies being exporter and CHA respectively are not liable to be penalized under Section 114(iii) of the Customs Act, 1962. Accordingly penalty on both the appellants have been dropped. As the appellant M/s. Falcon International has not violated the provisions of the Customs Act, therefore goods are not liable for confiscation. Accordingly, redemption fine imposed on the appellant is also waived. With regard to the penalty on M/s Albatross Shipping Ltd., it is the shipping line who loaded the goods without obtaining Let export order, therefore, they have violated the provisions of Section 40 of the Customs Act, 1962. Therefore, they are liable to be penalized. But in the case of CSAV Group Agencies (India) P. Ltd. [2009 (7) TMI 165 - HIGH COURT OF JUDICATURE AT BOMBAY] penalty was reduced to 40% by the adjudication authority. Therefore the penalty in the present case is also be reduced to 40%. Issues:Penalty under Section 114(iii) of the Customs Act imposed on appellants. Violation of provisions of Customs Act due to loading goods without Let export order. Liability of exporter, CHA, and shipping line. Applicability of penalty reduction based on previous judgments.Analysis:The judgment pertains to appeals against an order imposing penalties under Section 114(iii) of the Customs Act on three appellants: M/s Venkatesh Agencies (CHA), M/s. Falcon International (exporter), and M/s. Albatross Shipping Ltd. The case revolves around the violation of Customs Act provisions when goods were loaded in a vessel without obtaining a Let export order. The appellant M/s. Falcon International filed a shipping bill, and despite a query raised during processing, the goods were loaded by the shipping line before the Let export order was obtained. The goods were later checked and allowed for export, leading to penalties on all three appellants.In the hearing, the advocate for the appellants argued that they were not aware of the goods being loaded without the necessary order, as they believed the goods would only be loaded post obtaining the Let export order. The advocate cited a precedent, CCE vs. N. Karim & Sons, to support the contention that exporters and CHAs have no control over goods once in the port area. The advocate emphasized the bonafide belief of the appellants in following proper procedures.Upon review, the judge found that exporters and CHAs indeed lack control over goods once in the port area, aligning with the precedent cited. Consequently, the penalties on M/s. Falcon International and M/s Venkatesh Agencies were dropped, as they were not liable under Section 114(iii) of the Customs Act. Additionally, since M/s. Falcon International did not violate Customs Act provisions, the redemption fine imposed on them was waived.However, concerning M/s. Albatross Shipping Ltd., the judge noted that the shipping line was responsible for loading goods without the necessary Let export order, thus violating Customs Act provisions. Referring to a previous judgment, the judge reduced the penalty imposed on M/s. Albatross Shipping Ltd. to 40% of the initial penalty set by the adjudication authority.Ultimately, the judge disposed of all appeals accordingly, with the penalties on M/s. Falcon International and M/s Venkatesh Agencies being dropped, and the penalty on M/s. Albatross Shipping Ltd. being reduced by 40%, in line with the precedents and legal interpretations.