2017 (10) TMI 1427 - AT - Customs

Customs penalties revoked for exporting Red Sanders wood without prior knowledge. Tribunal finds evidence discrepancies.

TNT INDIA P. LTD. Versus COMMISSIONER OF CUSTOMS, NEW DELHI

The Tribunal set aside penalties imposed on the appellants under Section 114(i) of the Customs Act, 1962 for exporting Red Sanders wood without prior ... Export of prohibited item - red sanders - confiscation - penalties - Held that:- Since, no certificates were furnished by the Wild Life Inspectors in respect of 6 Nos. of Memos, it cannot be said that all the goods covered under the shipping bills are red sanders, liable for confiscation - Further, the Detention Memos do not identify any method and procedure adopted by the Wild Life Department for arriving at the conclusion that the description of goods declared by the exporter is false or incorrect. The fact is not under dispute that the Department did not examine any Wild Life Inspectors, even if, request was made by the appellant for cross-examination of those persons. Further, it is noted that the competent authority to examine the type of wood, would be the experts in the Forest Department. It is not clear as to why no reference or opinion was taken from them - Thus, the endorsement made in the Detention Memo by the Wild Life Inspectors cannot be considered in isolation, without any further substantiation, that the goods as per the courier shipping bills were in fact red sanders. Regulation 4(2) of Courier Regulations, 2010 provides that the export goods shall bear a declaration from the sender or consigner regarding the contents of each of the packages and the total value thereof. Further, Regulation 6(2)(b) ibid mandates that no person shall, except with the permission of proper Officer, open any package of export goods, brought into the customs area, to be loaded on the flight - the courier agency has very limited role in checking of the consignments contained in the courier packages. Thus, it cannot be said that the appellant had the reason or occasion to inspect the contents of the package and accordingly, relied on the declaration made by the consigner for the purpose of preparation of the shipping bills. The department has not proved the fact with any substantial evidence that there was prior knowledge on the part of the appellants in respect of the allegations made against them - Therefore, as per settled principle of law, provisions of Section 114(i) ibid cannot be invoked, justifying imposition of penalties. Appeal allowed - decided in favor of appellant. Issues:Penalties imposed under Section 114(i) of the Customs Act, 1962 for prohibited export of Red Sanders wood without prior knowledge by the appellants.Analysis:1. The case involved penalties imposed on the appellants for the export of Red Sanders wood, deemed prohibited under the Wild Life (Protection) Act and CITES. The Customs Department detained the consignments and sought confirmation from Wild Life Inspectors, who reported that the goods were indeed Red Sanders wood. The penalties were imposed under Section 114(i) of the Customs Act, 1962, which were upheld by the Commissioner of Customs (Appeals).2. The appellant's advocate argued that only 3 out of 9 Detention Memos confirmed the contents as Red Sanders wood, questioning the basis for penalties on all consignments. The advocate contended that the appellants lacked prior knowledge of the contents, as they relied on consigners' declarations for shipping bills. The advocate cited various judicial pronouncements to support the argument against penalties.3. The respondent's representative supported the findings in the impugned order, while the appellant's advocate emphasized the lack of evidence proving appellants' prior knowledge of the prohibited goods. The Tribunal examined the Detention Memos and noted discrepancies in endorsements by Wild Life Inspectors, indicating insufficient substantiation for the allegations against the appellants.4. The Tribunal highlighted the importance of Regulation 4(2) of Courier Regulations, 2010, which mandates sender declarations for export goods. It also noted that the courier agency's role in checking consignments is limited, absolving the appellants from inspecting the contents. The lack of substantial evidence regarding appellants' prior knowledge led the Tribunal to conclude that penalties under Section 114(i) could not be justified.5. Ultimately, the Tribunal found no merit in the impugned order's imposition of penalties on the appellants. The penalties were set aside, and the appeals were allowed in favor of the appellants. The judgment was pronounced in open court on 30-10-2017.