TaxTMI 
TaxTMI 
2022 (3) TMI 238
X X X X Extracts X X X X
X X X X Extracts X X X X
....Permitted under Shipping Bill No. 6196190 dated 01.03.2016. (ii) I deny the duty drawback of Rs. 5,527/-.claimed by M/s.Marathon Corporation, as the goods have not been exposed under the said Shipping Bill under the provisions of Rule 2 (c) read with Rule 3 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. (iii) I order absolute confiscation of the logs of Red Sanders weighing 11.750MTs and valued at Rs. 4.70 Crores seized under seizure memo dated 29.03.2016 which were attempted to be exported vide shipping bill no 6196190 dated 01.03.2016 under Section 113(d), 113(1), 113 (i) and 113(ia) of Customs Act, 1962 read with rule 11 of Foreign Trade (Regulation) Rules, 1993, provisions of Indian Forest Act 1927 and CITES Convention,1973. (iv) I order absolute confiscation of the total quantity of 15190 kgs of onions in 311 jute bags having declared FOB value of Rs. 3,10,948/ seized under Section 110 of the Customs Act, 1962, under seizure memo dated 29.03.2016, cleared for exportation under claim of duty drawback under Section 74 of the Customs Act, 1962, used as cover cargo to conceal the offending goods i.e RED SANDERS under the provisio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....- and found concealed under declared goods i.e Onions in Jute bags having declared FOB value of Rs. 3,10,948/- were seized vide Seizure Memo dated 29.03.2016 under Section 110 of the Customs Act, 1962. 2.5 Wildlife Crime Control Bureau, Western Region, vide their letter no. C-13011/3/2009/Vol.6/15 dated 01.04.2016 confirmed that the samples drawn from container no. ARCU 4531856, of wooden piece forwarded for testing were of Red Sanders (Pterocarpus santalinus), listed in Appendix II of Convention on International Trade in Endangered Species of Wild Flora & Fauna' (CITES) and export of the same was prohibited under Export Policy. 2.6 Investigations undertaken revealed 11750 Kgs of wooden logs of Red Sanders (Pterocarpus santalinus) having an illicit international value of Rs. 4,70,00,000/- concealed under the cover cargo of 15190 kgs of onions in 311 jute bags having declared FOB value of Rs. 3,10,948/-were attempted to be smuggled out of India in container no. ARCU 4531856 vide Shipping bill No. 6196190 dated 01.03.2016. The Shipping Bill was filed for export in ICD Janori, Nashik from where the subject container arrived on Trailer no. MH 06 AC-8867 to JNPT Port in Nhava ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....show cause as to why: (i) Let Export permitted under Shipping Bill No. 6196190 dated 01.03.2016 should not be cancelled. (ii) The duty drawback of Rs. 5,527/ - claimed by M/s.Marathon Corporation should not be denied as the goods have not been exported under the said Shipping Bill under the provisions of Rule 2(c) read with Rule 3 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. (iii) The logs of Red Sanders weighing 11.750 MTs and valued at Rs. 4.70 Crores seized under seizure memo dated 29.03.2016 which were attempted to be exported vide shipping bill no 6196190 dated 01.03.2016 should not be confiscated under Section 113(d), 113(1), 113 (i) and 113(ia) of Customs Act, 1962 read with rule 11 of Foreign Trade (Regulation) Rules, 1993, provisions of Indian Forest Act 1927 and CITES Convention 1973. (iv) The total quantity of 15190 kgs of onions in 311 jute bags having declared FOB value of Rs. 3,10,948/- seized under Section 110 of the Customs Act, 1962, under seizure memo dated 29.03.2016, cleared for exportation under claim of duty drawback under Section 74 of the Customs Act, 1962, used as cover cargo to conceal the offe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e required a bonafide exporter for booking a container to load the red sanders and the said company was a regular exporter from ICD Janori, and this would have ensured smooth clearance through Customs at ICD Janori. Further, he was aided by M/s Marathon Corporation, who neither asked for any documents about the credentials of Sanjay Pawar nor verified the credentials of Sanjay Pawar, and also allowed the container booked by them Marathon, along with the goods to be transported by the truck trailer arranged by Sanjay Pawar. The said Sanjay Pawar also appears to have replaced the declared goods with the prohibited Red Sanders enroute ICD Janori to JNPT Port. Sanjay Pawar not only replaced the declared cargo with prohibited goods but also appears to have removed the original Central Excise & Custom Bottle Seal number affixed on the said container while replacing the goods and faked the same with the tampered Seal with the same mark and number in order to hoodwink the authority in case the container was checked enroute to Port for smooth sailing of the cargo. 10.2 M/s. Marathon Corporation, Mumbai have aided and abetted Sanjay Pawar in the smuggling of prohibited Red Sanders b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e container was sent by Sanjay Pawar for stuffing. Shri Nilesh Katira inexplicably neither asked for the driver's particulars in the form of PAN Card nor address proof or aadhar card or any identification proof containing his photograph nor verified his credential before handing over the goods to him. These actions of Shri Nilesh Katira of M/s. Marathon Corporation, Mumbai clearly have aided and abetted the purported smuggling of Red Sanders by Sanjay Pawar and his accomplices. 10.4 Further, I find that the noticees have knowledge of Public Notice No. 17/2012 and at the cost of their KYC documents they arranged the empty container and allowed the container booked by them (Marathon) along with the goods to be transported by the truck trailer arranged by Sanjay Pawar without asking for any documents about the credentials of neither Sanjay Pawar nor the driver of the truck trailer. The Sanjay Pawar took stock of this approach of M/s.Marathon Corporation and Shri Nilesh Katira and make them part of his plot of smuggling of Red Sender. Their careless approach and non-compliance of the know your customer (KYC) norms "enabled said Sanjay Pawar in the illegal attempted export ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Penalty for attempt to export goods improperly, etc. - Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act, whichever is the greater;" 4.4 From the findings as recorded by the adjudicating authority in para 10.1 to 10.6 of the order in original, I do not find even a whisper that the Appellants before me have performed an act of omission or commission in the respect of the prohibited "red sander wood" which was substituted in the container which was stuffed by them at ICD Janori in the presence and supervision of proper officer of Customs. Appellants admittedly were dealing in the export of Vegetable and Fruits. Undisputedly and admittedly the container at ICD Janori was stuffed with 27000 Kgs of the onions, for which the proper shipping....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Shipping Bill, certified copy of invoice, packing list and other documents in sealed cover. The goods are to be transported by container or truck, the entire cargo body of which can be sealed with tamper proof bottle seals, all the packages would be stuffed can be sealed with tamper proof bottle seals, all the packages would be stuffed in the container/trucks under supervision of customs and representatives of the custodians. After the stuffing, the containers/trucks would be sealed with tamper proof bottle seals. The examination order and endorsements that the trucks are sealed would be made on both copies of Shipping Bill and AR4 from, it would be signed by customs as well as custodian's representatives. The seal number would be endorsed on all documents. 6. The custodians would be required to move the goods by road or rail upto Gateway Ports / Airports." After stuffing and sealing of the container in terms of this circular, all the responsibility and accountability vests with the ICD and exporter cannot be held liable for the substitution thereafter. That being so even if it is admitted that the appellants have by their acts of not verifying the credentia....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fanciful to digest. It is admitted by Shri A. Mohamed Naseer that there was omission on his part by giving the signed blank letter heads to Shri Farooq Basha. There is also an admission on the part of Shri Farooq Basha that he committed a mistake by leaving the said blank letter heads in the vehicle at the time of sale. These are serious omissions on the part of the appellants which has aided in the attempt for smuggling. The question then is as to whether omissions are illegal omissions so as to be an ingredient to fall within the third limb of Section 107 IPC. An omission can be considered to be illegal if what has been omitted was required to be done by such person under law. Thus, there should have been an obligation to do a particular act under some law. Such obligation may be under any Act, Rules, Regulations, Instructions. In the present case, entry into CFS/Port is restricted. Access to this area can be obtained only if a request is made by the transport agency along with recommendation letter of the Trailor Organizers' Association. It is also necessary to give details of the driver and the trailer truck/lorry in such applications. After obtaining the gate pass, the transp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntainer were intact. The rivets at the other end of the container doors had been deftly cut and the container stuffed with red sanders logs. Further investigation revealed that two persons by name S/Sh. Muralikrishna and Ramesh had befriended the exporter as representatives of the buyer in Malaysia. They behaved with the authorities as if they represented the exporter. The goods were examined at the ICD, Bangalore in the presence of S/Sh. Muralikrishna, Ramesh and the representative of the CHA and the container sealed. M/s. Caravel Shipping Services Pvt. Ltd., (CSSPL), the steamer agents had arranged container and the vehicle to carry the consignment to Chennai Port. After due process of law, the Commissioner confiscated 16.27 MTs of the red sander logs valued at Rs. 50 lakhs seized from the container under Section 113(d) of the Customs Act, 1962 (the Act). He also imposed penalties on various persons found to have associated with the attempt to smuggle out red sanders. An amount of Rs. 3 lakhs each was imposed on the exporter M/s. MRIPL and M/s. CSSPL both under Section 114 of the Act. The Commissioner had found that M/s. MRIPL and M/s. CSSPL had, by their acts of commission and o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner about the conduct of the steamer agent is also to the same effect. We find that these are not good enough reasons in arriving at a finding that the appellants had rendered the impugned goods liable for confiscation. The appellants have made prima facie case against the penalties imposed on them. In the circumstances, we order waiver of predeposit and stay of recovery of the impugned penalties till the disposal of the appeals." We have not heard anything from the department's side to change our prima facie view. Shri T.H. Rao, Ld. SDR, appearing for the appellants reiterates the finding in the impugned order and emphasizes that as per the statements recorded, not only this consignment but nine other similar consignments have been exported adopting the similar modus operandi. He states that the exporter should have been careful in ensuring that the container is not tampered with and the goods are not substituted. 2. Shri B. Venugopal, Ld. Advocate, appearing for the appellant exporter states that the exporters are not involved in the smuggling of red sanders nor any evidence has been found to that effect. On the other hand, the adjudicating Commissioner has gi....