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2009 (12) TMI 809 - AT - CustomsImposition of penalty on CHA u/s 114(iii) of the CA, 1962 - goods have been loaded and exported without proper documents i.e. shipping line and LEO - case of Revenue is that it is the duty of the CHA to be vigilant not to load the goods on the vessel without obtaining the LEO and the CHA along with shipping line, both are liable for penalty - Held that - It is true fact that when the goods are gated in, the goods are beyond the control of the CHA and the exporter - In the instant case, the CHA has informed the shipping line that the shipping bill be handed over at JNPT office as early as possible and the shipping line failed to follow the Customs law, so far that CHA who was not having any control after the goods were gated in, the CHA alone cannot be held liable when the exporter has also been exonerated - penalty set aside - appeal allowed - decided in favor of appellant-CHA.
Issues:
Appeal against penalty under Section 114(iii) of the Customs Act, 1962 for failure to produce shipping bill and Let Export Order (LEO) resulting in loading and export of goods without proper documentation. Detailed Analysis: Issue 1: Imposition of Penalty under Section 114(iii) of the Customs Act, 1962 The case involved an appeal by a Customs House Agent (CHA) against a penalty of Rs. 50,000 imposed for failing to produce necessary documents for the export of goods. The goods were loaded and exported without the required shipping bill and LEO, leading to allegations of violation of Customs Act provisions. The CHA argued that they were not in control of the goods after they were gated in and made efforts to obtain the LEO, but faced delays due to holidays and non-responsiveness from the shipping line. The Commissioner found the CHA liable for penalty under Section 114 of the Customs Act, 1962, as their omissions rendered the goods confiscatable under Section 113(g). The CHA contested the penalty imposition, citing their role as an agent of the exporter and the exporter's compliance with legal provisions. Issue 2: Liability of CHA and Shipping Line During adjudication, it was established that the CHA had communicated with the shipping line regarding the containers and the handing over of shipping bills at the port. The CHA's lack of vigilance in ensuring proper documentation before loading the goods on the vessel was highlighted. The Shipping Line was also held accountable for allowing the goods to be loaded without proper documentation and supervision. The CHA contended that they had taken necessary precautions and informed the shipping line about the shipping bill handover, emphasizing their limited control post-gating in of goods. The Shipping Line's failure to adhere to Customs regulations was a crucial factor in determining liability. Issue 3: Legal Precedents and Tribunal's Decision The learned SDR argued that the CHA cannot evade liability, citing relevant case laws. However, the Tribunal differentiated the present case from the cited precedents, emphasizing the unique circumstances where the exporter had complied with legal requirements, and the CHA's actions were influenced by the shipping line's non-compliance. The Tribunal found the Shipping Line primarily responsible for the breach, as they allowed loading without proper documentation. The Tribunal set aside the penalty imposed on the CHA, considering the exporter's exoneration and the lack of control the CHA had post-gating in of goods. In conclusion, the Tribunal allowed the CHA's appeal, emphasizing the Shipping Line's role in the violation and the CHA's limited control over the goods post-gating in. The decision highlighted the importance of adherence to Customs regulations by all parties involved in the export process to avoid penalties and confiscation of goods.
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