2009 (1) TMI 655 - AT - Customs

Stay/Dispensation of pre-deposit - Penalty on CHA - Held that - the CHA does not have any control over the container, once the same is permitted inside the gate. It is the responsibility of the Shipping Line to see that the container is loaded after receipt and verification of all the documents including the LEO. Hence, they are no way responsible for the container being loaded on to the vessel prior to the LEO. Hence, the question of their making any genuine attempt to stop the container from being loaded on the vessel does not arise at all - the CHAs are generally not at fault in the matter and for the lapse on the part of the Shipping Line, CHAs cannot be penalized. Penalty on exporter - Held that - It seems that the exporter was unaware about the registration of the Shipping Bill on 6-1-07, during the material time and was also unaware about the loading of the container on the vessel on 9-1-2007, during the material time. It further appears that the exporter never instructed the CHA or the Shipping Line to process the export goods for export without verification or without following the procedures prescribed for the purpose of export. LEO issued on 12-1-07, after sailing of the vessel on 9-1-07, is itself post facto permission for export. It automatically condoned the lapse of technical nature, as examination was already over and LEO was pending only for the correction of the invoice. Penalties waived - pre-deposit dispensed - appeal allowed.

Summary

Issues:
Stay petitions against penalties imposed by the Commissioner of Customs on exporter and CHA for exporting goods without Let Export Order.

Analysis:
The case involved stay petitions filed by the exporter and the CHA against penalties imposed for exporting goods without Let Export Order. The exporter exported a container without the necessary order, leading to penalties. The CHA claimed they sent an invoice for amendment, registered the Shipping Bill, and obtained the Let Export Order after the container sailed. The CHA argued they had no control once the container entered the port and were not responsible for loading it onto the vessel before the order. They highlighted the Shipping Line's role in verifying documents before loading. The CHA Association's representation supported the CHA's innocence in the matter. The judge noted that the exporter was unaware of the events during the material time and never instructed the CHA or Shipping Line to bypass procedures. The Let Export Order issued post-sailing condoned the technical lapse, as the goods were free for export and the export proceeds were realized. The judge found a strong prima facie case for waiving the penalties, dispensing with the pre-deposit and staying the recovery pending appeal.

This detailed analysis of the judgment highlights the arguments presented by both the CHA and the exporter, the role of the Shipping Line, the lack of responsibility of the CHA in the loading process, the exporter's unawareness of the events, and the issuance of the Let Export Order post-sailing as a condonation of the technical lapse. The judge's decision to waive the penalties and stay the recovery pending appeal is based on the findings of a strong prima facie case presented by both parties.