2015 (9) TMI 1016 - AT - Customs

Appeal No. C/176 & 177/2007 Mis-declaration of port of discharge Smuggling of red sander Customs alleged that appellants had close intimacy to mis-declaration of port of discharge Goods although was destined to Malaysia however shipping bill was made to show port of discharge as Colombo As a result of mis-declaration appellants were penalized under section 117 of Customs Act 1962 Held that - admitted case of mis-declaration of port of discharge as is revealed from documents filed to form part of EGM which connected both appellants These two appellants did not detach themselves from smuggling of red sander It cannot be said that they have no knowledge about port of discharge When goods exported were prohibited goods and not permitted to be exported from India and appellants assigned themselves to such export they are not immune from penal consequence of law These two appellants having been intimately connected with red sander export had conscious knowledge of port of discharge Therefore imposition of penalty on both is justified Decided against Appellants. Appeal No. C/191/2007 Mis-declaration of port of discharge Smuggling of red sander Held that - Appellant was actively involved in mis-declaration of port of discharge In course of smuggling whisper about modus operandi comes up As member of racket this appellant had not isolated him He was contributory to smuggling concealing material fact till discovery by investigation Plea that appellant had given his evidence under section 108 under duress failed to lend any credence for reason that after seven months of recording of confessional statement attempt was made to create fiction of duress No doubt about knowledge of appellant as to actual port of discharge Accordingly adjudication against this appellant does not call for any interference Imposition of penalty hereby confirmed Appeal dismissed Decided against Appellant. Appeal No. C/227 & 228/2007 Mis-declaration of port of discharge Smuggling of red sander Held that - Law is very clear as to role of vessel operator when combined reading of section 41 and 42 of Customs Act is made along with contents of EGM in Form 66 Clear from Form 66 that contents and nature of goods weight thereof description of shipping bills as well as details of consignor and consignee appearing in Form No. 66 was well within knowledge of commander of ship who certified description in that form Shipping bill described port of discharge as Colombo but goods were loaded into vessel bound to Malaysia which does not rule out breach of trust made by appellants Appellant were concerned with goods described in shipping bill as bailee therefore it cannot be said that vessel operators were innocent and having no knowledge about goods which were shipped in their vessels for delivery in port of discharge of Kelang in Malaysia When goods were prohibited goods it was primary duty of vessel operator not to allow same to be loaded into vessel Thus vessel operator having conscious knowledge of mis-declaration and exporting prohibited goods Therefore it is not at all proper to intervene to adjudication for which both appeals are dismissed Decided against Appellants

Summary

Issues Involved:
1. Mis-declaration of port of discharge.
2. Involvement in smuggling of red sanders.
3. Penalty imposition under section 117 of the Customs Act, 1962.
4. Role of vessel operators in the smuggling racket.
5. Validity of statements recorded under section 108 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Mis-declaration of Port of Discharge:
The appellants, M/s. Chakiat Shipping Services Pvt. Ltd. and M/s. Caravel Shipping Services Pvt. Ltd., were penalized for mis-declaration of the port of discharge. The goods intended for Malaysia were falsely declared to be discharged at Colombo. This mis-declaration was a key factor leading to their penalization under section 117 of the Customs Act, 1962, with a penalty of Rs. 10,000/- each.

2. Involvement in Smuggling of Red Sanders:
The adjudicating authority found that M/s. Caravel Shipping Services Pvt. Ltd. and M/s. Chakiat Shipping Services Pvt. Ltd. were closely involved with the smuggling racket. The investigation revealed that these companies were aware of the actual destination of the red sanders and were in contact with key figures in the smuggling operation, such as Kumar and Chitty Raja. Statements recorded under section 108 of the Customs Act, 1962, corroborated their involvement.

3. Penalty Imposition under Section 117 of the Customs Act, 1962:
The appellants argued that they had no conscious knowledge of the mis-declaration and thus should not be penalized. However, the adjudicating authority concluded that the appellants were not detached from the smuggling activities and had conscious knowledge of the port of discharge. Consequently, the penalty imposition under section 117 was upheld, dismissing the appeals.

4. Role of Vessel Operators in the Smuggling Racket:
M/s. NYK Line India Ltd. and M/s. Bengal Tiger Line India Pvt. Ltd. were penalized for their role as vessel operators in the smuggling of red sanders. The customs authorities found that these operators were involved in the export of prohibited goods through false declarations. Statements from their employees revealed that they were aware of the actual destination of the goods. The penalty of Rs. 10,000/- each under section 117 of the Customs Act, 1962, was justified, and their appeals were dismissed.

5. Validity of Statements Recorded under Section 108 of the Customs Act, 1962:
Appellant V.S. Krishnan contended that his statements were recorded under duress and that he was not connected with the smuggling. However, the adjudicating authority found no evidence to support the claim of duress and concluded that Krishnan was actively involved in the mis-declaration and smuggling activities. The penalty of Rs. 1,00,000/- imposed on him was confirmed, and his appeal was dismissed.

Conclusion:
The judgment upheld the penalties imposed on all appellants for their involvement in the smuggling of red sanders and mis-declaration of the port of discharge. The appeals were dismissed, and the adjudicating authority's findings were confirmed. The judgment also highlighted the need for stricter enforcement and potential amendments to the law to prevent such smuggling activities in the future.