TaxTMI 
TaxTMI 
2018 (1) TMI 439
X X X X Extracts X X X X
X X X X Extracts X X X X
....l dated 28.2.2015 and stuffed inside the container at M/s. Chola Container Freight Station (CFS), Tuticorin and granted let export order had been taken out while going to the harbor to an unknown godown and was restuffed with red sander logs for export to Jebal Ali, Dubai. The customs seal was found intact. The container was opened and examined in the presence of witnesses. On opening, the officers found that it contained red sander logs apart from declared cargo. The officers seized the red sanders as well as other goods, the lorry and the container. The value of red sanders was estimated to be Rs. 40 lakhs. As a follow-up action, the godown at Ettayapuram road was searched on 3.3.2015 and the officers found seven pieces of red sanders wood and other goods like empty cardboard cartons, painter drop cloth, groundnut skin in sacks, cotton floor mat and tools like hammers, crowbars, hand drilling machine, rivets etc. It appeared that the tools were used for tampering the doors of the container by removing the rivets used to fix the door handle, lock and replacing with adhesive rubbed rivets. Thus the door was opened without touching the customs seal. The modus operandi was that once ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ause 6(1)(k) of Handling of Cargo in Customs Area Regulation, 2009 and Public Notice No..1/2014 by not securing the transit of the export goods from CFS to port and thus helped the smuggling of prohibited goods. He adverted to Order-in-Original dated 27.7.2016 which was subsequently passed by the Commissioner of Customs in the proceedings initiated against the appellant for violation of clause 6(1)(i) of Handling of Cargo in Customs Area Regulation, 2009 as well as Regulation 6(1)(k). In the said order, the Commissioner had observed that the appellant had requested permission to the Commissioner of Customs, Tuticorin to engage outsource services of specific transporters. The department slept over the said request and the alleged activities had taken place prior to giving such approval. That therefore it cannot be said that the appellant did not comply with the provisions of the Regulations 2009. The proceedings initiated for violation of Regulations 2009 were thus dropped by the Commissioner. That therefore the penalty imposed under Customs Act cannot sustain since there is a finding recorded by the Commissioner that there was no failure on the part of the appellant to ensure that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....muggling of red sanders. The appellant had booked the container on commission basis. The container was booked by one Smt. Sheeja of M/s. Oceanus Shipping Pvt. Ltd. Bangalore. As it was on commission basis, it is not possible to get the KYC details of the exporter directly. However, the appellant had verified the KYC details of the exporter through M/s. John Cargo and Transport Services, Chennai to whom the KYC details of the exporter had been furnished. The appellant did not have any direct contact with the exporter and packing of the container having been done on behalf of their client M/s. John Cargo and Transport Services, Chennai. Such KYC details were submitted to department by M/s. John Cargo and Transport Services. That therefore the imposition of penalty on the appellant is unjustified. He also relied upon the decisions placed by the counsel appearing in the case of M/s. Bhavani Shipping Services India Pvt. Ltd. He pleaded that the penalty may be set aside. 5. On behalf of Revenue, ld. AR Shri K. Veerabhadra Reddy and Shri R. Subramaniyan argued the matter. It was submitted that M/s. Chola Logistiks Pvt. Ltd. being CFS agents are responsible to comply with clause 6(1)(k) o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain KYC of the client. M/s. Bhavani Shipping Services India Pvt. Ltd. is a shipping liner and they did not have any direct transaction with the exporter. Their immediate client was Ms/. Sea Port Lines (India) Pvt. Ltd. and they have produced the KYC details of M/s. Sea Port Lines (India) Pvt. Ltd. Similar is the case with regard to M/s. Sea Port Lines (India) Pvt. Ltd. who have submitted the KYC details through M/s. John Cargo and Transport Service, Chennai. Department does not have a case that these appellants have any direct transaction with the exporter. The Tribunal in similar set of facts have discussed in detail the scope for imposing penalty. In Scope Amra Logistics (I) Pvt. Ltd. (supra), the Tribunal has observed as under:- 5. In view of the facts of the present case, it is clear that the appellants, were not involved in the smuggling of Red Sanders for the reason that the containers were stuffed and sealed with Corrugated Boxes at ICD, Waluj under the physical supervision of the Customs officers, thereafter the custodian got the control of the container. The tampering of seal, change of the goods, i.e., loading concealment of prohibited goods, i.e., Red Sanders were take....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accused nor the exporter/owners of the goods have been found and brought to adjudication and in the absence of examination of the main exporter, and further in absence of the purported prohibited goods not found and or confiscated, I hold that no case is made out for imposition of penalty against the appellant. Accordingly, the impugned order to extent imposition of penalty on the present appellant is set aside. Thus, the appeal is allowed. The appellant shall be entitled to consequential relief, if any, in accordance with law. 9. In the case of Maheshwari Rocks (I) Pvt. Ltd. (supra), the Tribunal has held as follows:- 4. We have heard Shri Hari Radhakrishnan, Ld. Adv., on behalf of the appellant M/s. Caravel Shipping Services Pvt. Ltd. He states that the appellants did not arrange for the transport. They have only given the container on hire for the export of legitimate cargo and they are in no way concerned with the substitution of the cargo or tampering of the seals on the container. He also states that the container cannot be held to be liable for confiscation for concealment of the cargo in the circumstances of this case. 5. We find merit in the submissions made by the ....