Penalties on appellant and CHA not imposable when the goods were loaded in the vessel without Let Export Order by the Shipping Line.

PJ-Case law-2013/14-1580

Case:-M/s FALCON INTERNATIONAL Vs COMMISSIONER OF CUSTOMS (EXPORT), NHAVA SHEVA

Citation:-2013-TIOL-678-CESTAT-MUM

Brief Facts:-The facts of the case are that the appellant namely M/s Falcon International filed a shipping bill on 23.01.2007. After filing the shipping bill, some query was raised by the Superintendent in charge for processing the shipping bill and during the pendency of the issuance of Let export order, the goods were loaded in the vessel by the shipping line on 26.01.2007 and the vessel was sailed on the same day. Later on while issuing the Let export order, the goods were called back and found to be in order as per the shipping bill. Thereafter, the goods were allowed to be exported after obtaining proper Let export order. As the consignment was loaded on the vessel and vessel was sealed on 26.1.2007 without obtaining Let export order therefore, it was held that the appellant has violated the provisions of Customs Act and therefore, penalties on all the appellants were imposed as per impugned order.

Appellant’s Contention:-Appellant submitted that after entering the port area, the exporter and the CHA has no control over the goods. In this case, although there was a query raised by the Superintendent while processing the shipping bill but appellants are not aware of the fact that goods have been loaded in the vessel by the shipping line and same has been sailed on 26.1.2007 without obtaining proper Let export order. Therefore, as the appellant are under the bonafide belief that the goods are to be loaded in the vessel only after obtaining the Let export order as the goods were not in their control, therefore they are not liable to be penalized under Section 114 (iii) of the Act. To support this contention, he placed reliance on CCE vs. N. Karim & Sons 2010 (251) ELT 444which was confirmed by the Hon'ble High Court of Bombay in Custom Appeal no. 47 of 2010 on 06.07.2010.

Respondent Contention:-Respondent reiterates the impugned order.

Reasoning of Judgement:-Tribunal considered the submissions made by both the parties and concluded that after going to the port area, the CHA exporter have no control over the goods as held by the Tribunal in the case of N. Karim & Sons. Therefore, it was held that the appellant namely M/s. Falcon International and M/s Venkatesh Agencies being exporter and CHA respectively are not liable to be penalized under Section 114(iii) of the Customs Act, 1962. Accordingly penalty on both the appellants have been dropped. As the appellant M/s. Falcon International has not violated the provisions of the Customs Act, therefore goods are not liable for confiscation. Accordingly, redemption fine imposed on the appellant is also waived. With regard to the penalty on M/s Albatross Shipping Ltd., this Tribunal has held that it is the shipping line who loaded the goods without obtaining Let export order, therefore, they have violated the provisions of Section 40 of the Customs Act, 1962. Therefore, they are liable to be penalized. But in the case of CSAV Group Agencies (India) P. Ltd. 2009 (248) ELT 165 =(2009- TIOL-56-CESTAT-MUM)the Hon'ble High Court has reduced the penalty to 40% of the penalty imposed by the adjudication authority. Therefore, Tribunal reduced the penalty imposed on the Shipping Line to the extent of 40% of the penalty imposed by the adjudicating authority.

Decision:-Appeals are disposed off in the above terms with consequential relief.

Comment:-The analogy drawn from this case is that after entering the port area, the exporter and the CHA have no control over the goods and if the goods are loaded in the vessel without proper let export order by the shipping line, it is fault of the Shipping Line and not of the exporter or the CHA. Accordingly, penalty is imposable on Shipping Line.

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PJ-Case law-2013/14-1580

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