2006 (6) TMI 242 - AT - Customs

Summary

Issues:
1. Breach of Section 51 of the Customs Act by the appellants in removing export goods without intimation.
2. Imposition of penalties under Section 117 of the Customs Act on the company and its General Manager.
3. Applicability of Section 45 and Section 141 of the Customs Act to export goods handled by a custodian in an Inland Container Depot (ICD).

Issue 1: Breach of Section 51 of the Customs Act
The appellants, custodians of imported goods at the Inland Container Depot (ICD), Tirupur, were appointed by the Commissioner of Customs. Export goods brought to the ICD were removed without intimation to the department, considered a breach of Section 51 of the Customs Act. Penalties were proposed under Section 117 of the Act, contested by the appellants. The original authority imposed penalties of Rs. 10,000 each on the company and its General Manager, upheld by the Commissioner (Appeals).

Issue 2: Imposition of Penalties under Section 117
The appellants argued that no breach of law occurred as the export goods were taken back with proper gate passes and no mens rea was involved. They contended that Section 45 of the Customs Act, governing imported goods, does not apply to export goods handled by custodians. The separate penalty on the General Manager was also challenged under Section 117.

Issue 3: Applicability of Section 45 and Section 141 to Export Goods
The Tribunal acknowledged that Section 45 of the Customs Act pertains to imported goods handled by custodians, not export goods. However, Section 141 subjects all goods in a Customs area to the control of Customs officers. The ICD, Tirupur, being a Customs area, required the custodian to comply with the control of Customs officers. The removal of export goods without notice to the proper officer of Customs breached Section 141, justifying the penalties. The imposition of penalties under Section 117 was deemed unsustainable as the Show Cause Notice (SCN) did not allege contravention of Section 141. The penalties imposed on the company and its General Manager for the same offense were set aside.

In conclusion, the penalties imposed on the appellants were set aside, and the appeals were allowed. The Tribunal clarified that custodians of ICDs must inform and operate under the supervision of Customs officers for export goods, as per Section 141 of the Customs Act. The procedure laid down by the Collector for handling export goods should be considered under Section 141.