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2011 (9) TMI 119 - AT - CustomsIllegible export - Goods in this case were loaded on the vessel without obtaining the Let Export Order. - The fact that the goods were loaded on the vessel and the vessel had left without obtaining the LEO is not disputed by any of the appellants. - penalties have been imposed by the Commissioner on the exporter, the CHA and the shipping line under Section 114 of the Customs Act - Held that - since the goods are liable for confiscation under Section 113(g) of the Customs Act, the appellants are liable for penal action under Section 114 of the Customs Act. - Penalties imposed by the commissioner confirmed - redemption fine reduced.
Issues Involved:
1. Export of goods without obtaining Let Export Order (LEO). 2. Liability of the exporter, Custom House Agent (CHA), and shipping line for penalties under the Customs Act. 3. Applicability of Section 114(ii) versus Section 114(iii) of the Customs Act for penalty imposition. 4. Requirement of mens rea for penalty imposition under the Customs Act. Detailed Analysis: 1. Export of Goods Without Obtaining Let Export Order (LEO): The case revolves around three containers shipped out of India on 21.5.2008 without obtaining the Let Export Order (LEO) from the Customs authority. The goods, declared as Basmati rice with an FOB value of Rs.46,68,300/-, were later called back and examined, confirming the declared contents. The containers were seized for violating the Customs Act and were liable for confiscation under Section 113(g) of the Customs Act. The goods were eventually allowed to be exported on a provisional basis upon execution of a bond and bank guarantee by the exporter. 2. Liability of the Exporter, Custom House Agent (CHA), and Shipping Line for Penalties: The Commissioner of Customs imposed a fine of Rs.9,00,000/- on the exporter under Section 125 of the Customs Act and a penalty of Rs.5,00,000/- each on the exporter, CHA, and shipping line under Section 114 of the Customs Act. The appellants contested the penalties, arguing that the goods were stuffed under Customs supervision and the LEO was obtained only on 22.5.2008 due to a system issue. The exporter claimed no liability as the containers were loaded by the shipping line without their instance. The CHA argued that they had informed the shipping line to ship the goods on the next vessel, and the shipping line contended that the containers were gated in without notice and loaded unchecked. 3. Applicability of Section 114(ii) Versus Section 114(iii) of the Customs Act for Penalty Imposition: The shipping line's counsel argued that the penalty should be imposed under Section 114(ii) as the goods were dutiable and not prohibited. However, the Tribunal found that the case was not about duty evasion since the duty was already paid, thus falling under Section 114(iii). The Tribunal upheld the Commissioner's findings but reduced the penalties considering the facts and circumstances. 4. Requirement of Mens Rea for Penalty Imposition Under the Customs Act: The appellants argued that there was no mens rea (criminal intent) in their actions. However, the Tribunal referred to the Madras High Court's decision in CC(E), Chennai vs. Bansal Industries, which held that mens rea is not required for penalty imposition under the Customs Act. The Tribunal upheld the penalties but reduced the amounts, considering the lack of mens rea. Conclusion: The Tribunal upheld the findings of the Commissioner regarding the imposition of fines and penalties on the exporter, CHA, and shipping line under Section 114 of the Customs Act. However, the penalties were reduced as follows: - Redemption fine reduced from Rs.9,00,000/- to Rs.1,00,000/-. - Penalty reduced from Rs.5,00,000/- to Rs.1,00,000/- each on the exporter and the CHA. - Penalty on the shipping line reduced to Rs.2,00,000/-. Disposition: The appeals were disposed of in the above terms, with the revised penalties and fines being pronounced in court on 30.9.2011.
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