2015 (4) TMI 345 - AT - Customs

Confication of goods u/s 113 - Penalty u/s 114 - goods exported without 'Let Export Order' of the proper officer under Section 51 of the Customs Act, 1962 - Held that - In the case of loading of container on the vessel and sailing of vessel without obtaining 'Let Export Order', the shipping line alone can be held liable for penalty and not the exporter. - As regards the reliance placed by the learned AR in the case of Nichrome India Ltd. (2009 (7) TMI 648 - CESTAT, MUMBAI), the other coordinate benches, even after referring to the said judgment granted relief to the assessee relying on the Bombay High Court Division Bench judgment in the case of Kusters Calico Machinery Ltd. (2010 (3) TMI 474 - BOMBAY HIGH COURT). Therefore, the judgment in the case of Nichrome India Ltd. (2009 (7) TMI 648 - CESTAT, MUMBAI) stand overruled. - in the facts and circumstances of the case, the appellant-exporter should not have been imposed any penalty, particularly when the shipping line was imposed with a penalty in the same case. - Decided in favour of assessee.

Summary

Issues:
Violation of Sections 40 and 51 of the Customs Act, 1962 regarding export procedures and penalties imposed on the exporter for goods exported without 'Let Export Order.'

Analysis:
The case involved an appeal against an order modifying penalties imposed on the exporter for exporting goods without the required 'Let Export Order.' The appellant exported goods without the proper officer's authorization, leading to confiscation and a penalty of Rs. 1,25,000. The Commissioner reduced the penalty to Rs. 1,00,000, prompting the appeal.

The appellant argued that the provisions of Sections 40 and 51 of the Customs Act were misapplied, as they pertain to the conveyance's in-charge and the proper officer, not the exporter. The appellant contended that the responsibility for loading containers and obtaining the 'Let Export Order' lies with the shipping line, not the exporter. The appellant cited cases where exporters and CHAs were granted immunity from penalties in similar situations.

On the contrary, the Revenue argued that the exporter is responsible for any violations by the shipping line, acting as the exporter's agent. They cited a judgment holding an exporter liable for similar breaches.

The Tribunal noted that the exporter had no control over the loading of containers onto the vessel and sailing without the 'Let Export Order.' It emphasized that the shipping line's actions, not the exporter's, led to the violation. Citing various judgments, the Tribunal held that penalties should be imposed on the shipping line, not the exporter, in such cases.

Referring to precedents, the Tribunal highlighted that penalties on shipping lines were upheld while penalties on exporters were set aside in similar cases. The Tribunal concluded that the exporter should not have been penalized, especially when the shipping line was penalized in the same case.

Ultimately, the Tribunal allowed the appeal, providing consequential relief to the appellant-exporter, and disposed of the stay petition.

The judgment reaffirmed that in cases of exporting goods without the required authorization, penalties should be imposed on the shipping line responsible for the violation, not on the exporter.