2015 (5) TMI 326 - AT - Customs

Penalty u/s 114(iii) - goods exported by the Appellant were loaded on the vessel by the Shipping line on 9-10-2008, before the Let Export Order was passed by the proper officer of customs on 10-10-2008 - Held that - There is no allegation nor any evidence in the Notice that the Appellant-exporter was aware of the goods having been loaded on to the vessel on 9-10-2008, before the passing of the Let export order on 10-10-2008. The Notice itself in para 6 states that the person in charge of the conveyance without confirming from the exporter or Custom House Agent whether customs formalities had been completed and without collecting the Shipping Bill had permitted loading of the goods. Under Section 40 of the Customs Act, 1962 the responsibility has been cast on the person in charge of the conveyance to ensure that the goods are not loaded on the vessel unless shipping bill duly passed by the proper officer has been handed over to him by the exporter. Further under Section 34 of the Customs Act, 1962 the loading of the goods is done under the supervision of the proper officer of customs. The Appellant who is the exporter has no control over the goods or their loading once the goods are carted into the port and the responsibility to ensure that that the goods are not loaded on the vessel before the Shipping Bill is passed is squarely cast on the person in charge of the conveyance under Section 40 of the Customs Act, 1962. The shipping agent has been duly penalized and there is no warrant for imposition of penalty on the exporter who is in no way responsible for the contravention by the Shipping agent. This view is squarely supported by the decision of the Hon ble Bombay High Court in the case of Commissioner v. Kusters Calico Machinery Ltd. - 2010 (3) TMI 474 - BOMBAY HIGH COURT . Accordingly the impugned order to the extent it imposes penalty on the present Appellant exporter is liable to be set aside. - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalty under Section 114(iii) of the Customs Act, 1962 for loading goods before the "Let Export Order" was passed.
2. Responsibility and liability of exporter in case of goods being loaded on vessel before proper authorization.
3. Allegations of procedural lapses and responsibility of the exporter in ensuring compliance with customs regulations.
4. Justification for setting aside the penalty imposed on the exporter.

Analysis:

Issue 1: Imposition of penalty under Section 114(iii) of the Customs Act, 1962
The appeal challenged the penalty of &8377; 6 lakhs imposed on the exporter for loading goods onto a vessel before the "Let Export Order" was passed. The Customs Act, 1962 mandates that export goods should not be loaded without proper supervision and authorization. The Commissioner imposed penalties on various parties involved, including the exporter, based on the sequence of events leading to the loading of goods before the required authorization.

Issue 2: Responsibility and liability of exporter
The exporter argued that once the container entered the notified port area, the responsibility shifted to the shipping lines for the safety and loading of the container. The exporter contended that any issues arising between the Customs House Agent (CHA) and the shipping lines should not result in penalties for the exporter. The exporter emphasized that the loading of goods before the "Let Export Order" was a procedural lapse by the shipping agent and should not be attributed to the exporter.

Issue 3: Allegations of procedural lapses and exporter's responsibility
The appeal highlighted that the exporter had no knowledge of the goods being loaded onto the vessel before the proper authorization. The responsibility for ensuring compliance with customs regulations, including the proper issuance of shipping bills and supervision during loading, falls on the person in charge of the conveyance and the customs officers. The exporter's lack of control over the loading process after the goods entered the port area absolved them of direct responsibility for the procedural lapse by the shipping agent.

Issue 4: Justification for setting aside the penalty
The Tribunal found that the exporter was not aware of the goods being loaded prematurely onto the vessel. Citing the decision of the Hon'ble Bombay High Court, the Tribunal ruled that the exporter, who had no control over the loading process, should not be penalized for the actions of the shipping agent. Consequently, the penalty imposed on the exporter was set aside, providing consequential relief. The Tribunal's decision emphasized the division of responsibilities under the Customs Act and the lack of direct involvement by the exporter in the procedural lapse.

This detailed analysis of the judgment addresses the issues raised in the appeal, the legal principles involved, and the Tribunal's rationale for setting aside the penalty imposed on the exporter.