2009 (4) TMI 689 - AT - Central Excise

Export procedure - Appeal to Appellate Tribunal - Grounds - Penalty - Imposition of - Section 50 of the Customs Act

Summary

Issues:
1. Imposition of redemption fine on exporter under Section 125 of Customs Act.
2. Penalty imposed on Customs House Agent (CHA) under Section 114(iii) of the Act.

Issue 1: Imposition of redemption fine on exporter under Section 125 of Customs Act:

The case involves M/s. Mehta Exports and M/s. Mahendra Shipping Agency, where goods were exported prior to the issuance of Let Export Order, leading to a show-cause notice under Section 124 of the Customs Act. The Commissioner ordered confiscation of goods under Section 113(g) and imposed a fine of Rs. 5,00,000/- on the exporter under Section 125 in lieu of confiscation. The exporter challenged this fine, arguing that it was severe and harsh without proper consideration. The Tribunal noted that the exporter did not raise the issue of fine in the absence of goods during the show-cause notice. The Tribunal highlighted that the question of whether a fine can be imposed in the absence of goods is a mixed question of fact and law that needs to be specifically pleaded. Since this was not done, the Tribunal dismissed the appeal (C/982/08) against the redemption fine.

Issue 2: Penalty imposed on Customs House Agent (CHA) under Section 114(iii) of the Act:

The appeal by the CHA was against the penalty of Rs. 50,000/- imposed under Section 114(iii) of the Act. The goods were shipped without Let Export Order, leading to confiscation under Section 113(g). The CHA claimed ignorance of the shipment date, but the Tribunal rejected this defense, stating that ignorance cannot be accepted given the legal obligations of a CHA as per Customs House Agents Licensing Regulations, 2004. The Tribunal emphasized that the CHA's responsibilities extend up to the point of export, and they cannot escape penal liability under Section 114 of the Act. The Tribunal found the penalty imposed on the CHA to be reasonable and dismissed the appeal.

This judgment by the Appellate Tribunal CESTAT, Mumbai addressed the issues of redemption fine imposed on the exporter and penalty imposed on the Customs House Agent, providing detailed analysis and legal reasoning for each issue.