2013 (12) TMI 708 - AT - Customs

Customs Act penalties imposed on U M Cables Ltd. challenged in court. Let Export Order delay results in fines.

DELTA LOGISTICS Versus COMMISSIONER OF CUSTOMS (EXPORT), NHAVA SHEVA

The case involved the appellant, U M Cables Ltd., being penalized with a redemption fine of Rs. 7 lakhs and penalties under Sections 113(g) and 114(iii) ... Waiver of pre deposit - Confiscation of goods - Imposition of redemption fine and penalty - Held that:- where the goods are neither exported under bond nor are physically available for confiscation, redemption fine is not imposable. Therefore, redemption fine is not imposable in this case - prima facie, the applicant-exporter has made out a case for complete waiver of pre-deposit - where the factual matrix is that the containers were loaded on the vessel which sailed on 30-1-2007 and the same being Moharam holiday for Customs, CHA or the exporter were not authorised to go to Customs area, the ‘Let Export Order’ was taken only on 31-1-2007; in that case the Hon’ble High Court held that in these circumstances, the exporter and CHA could hardly be said to have committed breach of Section 50(1) of the Customs Act, 1962, since it was beyond their control - Following decision of Commissioner of Customs (Export) v. Kusters Calico Machinery Ltd. [2010 (3) TMI 474 - BOMBAY HIGH COURT] - Stay granted. Issues:1. Imposition of redemption fine and penalties under the Customs Act, 1962.2. Delay in obtaining 'Let Export Order' leading to penalties and redemption fine.3. Arguments regarding control over loading of goods and imposition of penalties.4. Applicability of redemption fine and penalties based on legal precedents.5. Different treatment of exporter, CHA, and shipping line in penalty imposition.Analysis:1. The judgment involves the imposition of a redemption fine and penalties under the Customs Act, 1962. The appellant, U M Cables Ltd., was penalized with a redemption fine of Rs. 7 lakhs and penalties of Rs. 7 lakhs, Rs. 1.75 lakhs, and Rs. 14 lakhs under Sections 113(g) and 114(iii) of the Act, respectively.2. The case revolves around the delay in obtaining the 'Let Export Order,' which resulted in penalties and a redemption fine. The exporter filed a shipping bill on 15-4-2008 for export to Karachi and Afghanistan, but the vessel sailed on 18-4-2008 before the 'Let Export Order' was granted on 19-4-2008. This delay led to the imposition of penalties and the redemption fine.3. Arguments were presented regarding the control over the loading of goods and the subsequent imposition of penalties. The exporter and CHA contended that they had no control over the loading process as it occurred without their knowledge due to technical reasons and a holiday. The CHA, in particular, highlighted that they were not permitted to visit the loading site, absolving them of liability.4. The judgment considered legal precedents to determine the applicability of redemption fine and penalties. It referenced the case law of Shiv Kripa Ispat Pvt. Ltd. and Kusters Calico Machinery Ltd., indicating that redemption fine is not imposable when goods are not exported under bond or available for confiscation. The court also relied on the decision in Kusters Calico Machinery Ltd. to support the waiver of penalties in certain situations.5. The judgment differentiated the treatment of the exporter, CHA, and shipping line concerning penalty imposition. While the exporter was granted a waiver of pre-deposit for redemption fine and penalties, the CHA was also granted a waiver based on the factual matrix of the case. In contrast, the shipping line was directed to make a pre-deposit of 50% of the penalty imposed on them, with further instructions for compliance and stay of the balance amount during the appeal's pendency.