TaxTMI 
TaxTMI 
2025 (11) TMI 1739
X X X X Extracts X X X X
X X X X Extracts X X X X
....arranged containers to various exporters of garments through ICD Salem. On investigation, it appears that certain persons, in the name of firms that were no longer in existence had exported the consignments by inflating the values for the purpose of availing higher duty drawback and had exported consignments which were actually garments of inferior quality. Further, it appears that the exporters in order to avoid stricter examination of goods, had mis-declared the destination port as UK or USA in the shipping bills, while the actual destination was Dubai. While the bill of lading presented to the Customs showed the destination port as UK, the exporter had managed to obtain another bill of lading fraudulently from the liner indicating the destination port as Dubai. In view of the above issues, the DRI had examined and had obtained statements from the exporter, custom house agents, freight forwarders etc., who were connected with the alleged export of garments. Based on the investigation, the Show Cause Notice was issued by DRI, Chennai in F.No.VIII/26/181/2007 dated 31.03.2009 proposing to recover the alleged drawback amount availed by the exporter along with interest under Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntent to facilitate the commission of fraudulent act committed by the exporter. No proof to show that appellants had intentionally aided the fraudulent act committed by the exporter and therefore appellants cannot be penalized under Section 114(iii) of the Customs Act, 1962. In support of the argument, the Ld. Counsel has relied upon the decisions rendered in the following cases. i. Vishnu Kumar vs. Commr. of Customs, New Delhi, 2010 (260) ELT 356 (Del) ii. Maersk India Pvt. Ltd. vs. Commr. of Cus. (Import), Nava Sheva, 2018 (362) ELT 181 (Tri-Mumbai) iii. Sanco Trans Limited vs. Collector of Customs, Bangalore, 1996 (83) ELT 557 (Tribunal) iv. Neptune's Cargo Movers Pvt. Ltd. vs. Commr. of Cus (Export), Chennai, 2007 (219) ELT 673 (Tri-Chennai) iv. On merits, it is argued that during the period in question, the appellants had been approached by Moses Selvakumar of M/s. Moshi Enterprises, Tuticorin, a clearing & forwarding agent in relation to several exports for arranging containers with liner agents for exporting garments to Dubai. Based on his booking order given in writing which contained the details such as number of containers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission of the unauthorized act. The contention of the appellant is that neither in the Show Cause Notice nor in the Order-in-Original there is any observation that the appellant instigated or participated in the fraud committed by the exporters. The appellant had no monetary benefit or shared the higher amount of drawback obtained by the exporters. vii. Further, a reference is made with regard to the decision rendered by the Tribunal Chennai in the case of Skyline Shipping & Logistics [2010 (262) ELT 986 (Tri.Chennai)] wherein empty containers were stuffed without any requisition from the CHA by the exporter. The cargo was substituted with the red sander wood logs prohibited for export. The Tribunal held that except for a finding that the appellant supplied the empty container there is no material or record to come to the conclusion that the appellant had in any way abetted the offence and accordingly, ordered to set aside the penalty imposed under Section 114 of the Customs Act, 1962. viii. Reliance is also placed on the decision rendered in the case of Airtravel Enterprises India Ltd. [2009 (23) ELT 275 (Tri.)] wherein it was held in favour of the CHA where the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lls of Lading and they have booked the containers based on the Booking Letter from Mr. Moses Selvakumar the CHA of the exporter. Considering the above submissions, imposition of penalties on these appellants on the grounds of offence committed by the exporters there is a need to primarily establish that the appellants have prior knowledge about the exports being made by overvaluation in order to obtain illegal drawback by the exporters. The facts are very clear that the appellants have only arranged the containers and collected the container charges with their margin. It is not reasonable to presume that the appellants have knowledge on the nature of the goods exported and their value or the description and containers were arranged, and the house Bill of Lading was issued as per the details furnished by the agent of the exporter. There is no possibility or need for the appellant to go into the legality of the exports for arranging of the containers or booking of the cargo. In the case of B.K. Manjunath v. C.C.EX., CUS. & ST, Mysore [2024 (388) E.L.T 217 (Tri. -Bang.)], the Tribunal while dealing with a similar issue, had set aside penalty on considering the fact that the person in-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Tribunal Chennai has held as follows: - "3. I have carefully studied the records of the case and the submissions by both sides. I find that the impugned order deals with attempted export of two consignments of fabrics under cover of shipping bills which had declared inflated value to obtain inadmissible drawback. I find that the value of the export goods is known to the exporter which he declares. The CHA cannot be faulted and held liable for any penalty if an exporter declares an incorrect value for the export goods in the shipping bill through the CHA. In the facts of the case, the offence found cannot be held to have been facilitated by any failure of the CHA. Moreover, the CHA cannot be penalized for negligence or lack of diligence. In the following case law cited by the applicant, the Tribunal had held in similar cases that CHA could not be penalized :- (1) A.N. Bhat v. Collector of Customs, 1991 (55) E.L.T. 580 (Tribunal) It was held that "mere negligence or want of diligence on the part of the Customs House Clearing Agent or the Customs Officers in clearing the goods would not ipso facto render their act culpable inviting penal consequences in ....