TaxTMI 
TaxTMI 
2018 (4) TMI 210
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....ports, filed a Shipping Bill for export of 20 MT of Granite Cobble Stones to Malaysia and accordingly, the abovesaid goods were stuffed into container at the exporter's factory at Kuppam on 03.08.2005 under the supervision of the Central Excise Inspector, Range I, Chittor, who had affixed his seal to the loaded container and allowed the same to be taken to Chennai port. The shipping bill had also been filed on the same date in the office of the Commissioner of Customs (Exports) Chennai. The Central Excise Inspector issued a certificate of verifying the empty container, checking the packages for the correctness of the contents and thereafter, loading of the packages into the container and sealing it with his seal. It is found that the Docks Intelligence Unit gathered intelligence that red sander wood logs, a prohibited item under the Foreign Trade Policy (2004-2009) were smuggled out of India by way of mis-declaration through Chennai port to Malaysia, Singapore and Hong Kong and based on the above intelligence gathered, the officers concerned identified a container TEXU 2338038(20') covered by Shipping Bill No.2124658 dated 03.08.2005, filed by one M/s. Archana Exports, for ....
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.... be used for moving the consignment from Kuppam to Chennai harbour and finally, after contacting the container agent and the CHA for necessary release of the container box and the documentations respectively, informed further that a trailer bearing Registration No.TN28E9696 with an empty container bearing the number TEXU 2338038 (20') came to his factory at Kuppam and the granite cobble stones were stuffed into it under the supervision of the Central Excise Inspector and after the affixing of the seal, the trailer left and he handed over the certified copies of the requisite papers and the sealed cover containing the seal to the person who came along with the trailer for handing over to the Chennai customs and according to him, that the shipping bills concerned for the abovesaid export has been generated in his firm's name i.e., Archana Exports, and later informed by the customs authorities that on the interception of the container, it was found to contain red sander wood logs instead of the declared cargo as described in the shipping bill and further, according to him, the trailer did not reach the harbour within a reasonable time and when he questioned Saravanan, with ref....
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....ore, they are liable for penalty under section 114 of the Customs Act, 1962 and the appellant i.e., the exporter, Chief Executive Officer of M/s. Archana Exporters in whose company's name illegal export was attempted to be done is also liable to penalty under section 114 of the Customs Act, 1962 and thereby called upon the appellant and others involved in the matter to show cause to the Commissioner of the Customs, Export (Seaport), Chennai, within 30 days from the date of receipt of notice. 5. The commissioner of customs (Exports) Custom house, accordingly on the basis of the explanation offered, passed the Order in Original No.6636/07, dated 31.08.07, by arriving at his findings involving the complicity of the appellant in the attempt of the export of the red sander wood logs by mis-declaration which are liable to be confiscated as per the section 113(i) of the Customs Act 1962, by recording his findings as against the appellant in the following manner. 18. I have carefully gone through the records, the written submissions and the personal hearing proceedings. It is seen from records of the case that Shri.Bhaskar Naidu, the Chief Executive Officer of M/s.Archana Exports ob....
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.... Sander Wood Logs had reached the premises of M/s.Archana Exports at 1 P.M. On 03.08.2005 and left Kuppam at 7.30 PM on the same day. By his own admission Shri.Robert Samson General Manager of Jedan Lines returned from Kuppam by Brindavan Express to Chennai on the same day. A check of the Railway Time Table Show that this train departs Kuppam at 4.10 P.M. Therefore, by his own admission Shri.R.Robert Samson, General Manager of M.s,Jedan Lines was in Kuppam on the very same day the container was being loaded with Red Sander Wood Logs. It cannot be a mere co-incidence that he handed over the paper to Shri.Saravanan's representative on 02.08.2005 at 3 PM and next day proceeded to the spot where the container was loaded with prohibited goods. 20. The mobile numbers of Shri.Slevam, Shri.Saravanan and Shri.Krishnan and other details such as the addresses were furnished by Shri.Bhaskar Naidu. Efforts made by the department to trace the three persons did not yield results. It is clearly established that Shri.Bhaskar Naidu masterminded the operation and put the same into operation in connivance with these persons. Accordingly, inter alia, imposed penalty of Rs. 10 lakhs on the appell....
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....ho are named to be involved in the attempt of the illegal export of the prohibited goods i.e., Selvam, Saravanan, Krishnan and in such view of the matter, according to him, merely because the shipping bill of the export had been issued in the name of the appellant company, that by itself would not fasten any liability on the appellant and therefore, according to him, he is not liable for any imposition of penalty under Section 114 of the Customs Act, 1962 and it is his contention that both the respondents had erred in holding that the appellant is liable for penalty as per the above provisions of law and therefore, seeks for the reversal of the same and the entertainment of the appeal preferred by the appellant. 9. However, it is contended by the standing counsel appearing for the customs department that based on the statements given by the appellant, it is found that he had interacted with reference to the export transaction with third parties, without a proper verification of their identity and the appellant had not also ensured to ascertain the veracity of the buyer at Malaysia, the middle men who had acted for the alleged buyer and also found to be in connivance with the middl....
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....it is further noted that the appellant is unable to give the correct particulars of the middle men, who had approached and interacted within as regards the export in question, it is seen that as rightly determined by the authorities concerned, the appellant cannot be declared to be an innocent person, particularly when it is noted that he had acted with the middle men without verifying their credentials etc., more particularly, the credentials of the buyer concerned and when it is noted that the appellant is unable to furnish any correct information as regards the various middle men who had approached and intermediated with him as regards the subject concerned, it is clearly found that the appellant is also in collusion and complicity and acted hand in glove with the middle men for arranging the smuggling of the prohibited goods to Malaysia by mis-declaration. When it is noted by the authorities concerned that the container involved and arranged by the middlemen, on examination, the rivets of the handles on the right side door of the container appeared to be tampered with and changed with new ones and though the seal was found to be intact, it is found that the middle men, who had ....
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....mount in cash, though some remittance had been made in bank from Malaysia, however, on an analysis of the materials placed on record coupled with the provisions of law, as above stated, it is found that the appellant has wittingly made himself liable for the penal action under the provisions of the Customs Act, 1962, for failing to ensure the proper and safe transit of the goods to the destination, which resulted in the intermeddling of the goods by the third parties and accordingly, the appellant having rendered himself liable for the seizure of the confiscated materials during the search, as rightly determined by the second respondent as well as the first respondent tribunal, it is found that the appellant is liable to penal action under Section 114 of the Customs Act, 1962. 11. In this connection, the standing counsel for the customs department placed reliance upon the decisions reported in (2017) 4 MLJ 257(Sanco Trans Ltd. vs.The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, No.26, Shastri Bhavan Annexe Building, Haddows Road, Chennai 600 006 and another) as well as the decision reported in 2017 (346) E.L.T. 547 (Mad.) (K.V.Shivaraj Vs. CESTAT, Chennai....