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2017 (3) TMI 214 - AT - CustomsDenial of DEPB benefit - penalty u/s 114(iii) of the CA, 1962 - export of almost 110 cartons of 100% cotton knitted men and women shirts - the containers loaded on vessel MV Mac Andrews America sailed from Mundra Port at 13.30 hours on 28.6.2006, without examination and assessment of documentation; also without Let Export Order permitting clearances by the proper officer - whether penalty on each of the appellants is justified in the facts and circumstance of the case? Held that - the principle laid down for imposition of penalty on the exporter and the CHA in various judgments is consistent in observing that once the factory stuffed container is gated in, no control remains with the exporter and/or CHA, hence , in the event of sailing of the vessel with the container of exported goods before issuance of LEO, imposition of penalty on the exporter and the CHA is unwarranted - In the present case, there is no substantial evidence either against the exporter or the CHA brought on record attributing their involvement for loading of the container and thereafter sailing of the vessel,l without LEO, resulting into contravention of relevant provisions of the Customs Act namely 34, 40 and 51 of the said Act - penalty on the appellant exporter M/s Arvind Mills Limited and the CHA M/s Chinubhai Kalidass & Bros cannot be sustained, accordingly, set aside. Penalty on surveyor - On behalf of surveyor, M/s Master Marine Services Pvt. Ltd it is vehemently argued that only because they prepared the Form No.6, therefore, they cannot be penalized - Held that - the CHA addressed a letter to CFS, Mundra providing the details of the container seal number etc. for issuance of Form No.6 to offload of the container. Also in the daily activity report dated 25.6.2006 prepared by the surveyor, it records the container number, destination etc. but no way these documents could be considered as indicating or allowing loading of the container on the vessel and thereafter for its export - the container was loaded and later sailed without the LEO and in violation of the relevant provisions of Customs Act,1962, without the involvement of surveyor - penalty imposed on them is also set aside. Penalty on shipping agent - Held that - considering the active role of the shipping line agent, in discharging/loading the export cargo on the vessel, ld. Commissioner has rightly arrived at the conclusion that for sailing/export of the said container on 28.6.2006 without LEO, the shipping line agent is at fault and accordingly penalized them - penalty imposed on the shipping line agent is too harsh as no evidence for intentional violation of the provisions of the Act has been brought on record, but their act or omission attributes to negligence or lack of co-ordination/communication - penalty on the shipping line is reduced to ₹ 50,000/-. Penalty on the terminal operator M/s MICT - Held that - imposition of penalty not justified, as as before loading the container in the vessel they had been communicated by the shipping line agent through the advance export list mentioning therein the list of containers that were to be loaded - penalty set aside. Appeal disposed off - decided partly in favor of appellant.
Issues Involved:
1. Imposition of penalty on the exporter for exporting goods without Let Export Order (LEO). 2. Liability of the Customs House Agent (CHA) in the unauthorized export. 3. Role and liability of the surveyor in the export process. 4. Responsibility and penalty on the shipping line agent. 5. Liability of the terminal operator in the export process. Issue-wise Detailed Analysis: 1. Imposition of penalty on the exporter for exporting goods without Let Export Order (LEO): The exporter, M/s Arvind Mills Ltd., was penalized for exporting goods without obtaining the Let Export Order (LEO) from the Customs Officer. The goods were loaded and the vessel sailed without proper assessment and clearance. The exporter argued that they had no control over the loading of the container once it was handed over to the CHA and the shipping line. The Tribunal found that there was no substantial evidence indicating the involvement of the exporter in the unauthorized loading and sailing of the vessel. Citing precedents, the Tribunal concluded that the penalty on the exporter was unwarranted and set it aside. 2. Liability of the Customs House Agent (CHA) in the unauthorized export: The CHA, M/s Chinubhai Kalidass & Bros., was responsible for handling the documentation for the export. The CHA argued that they were in the process of completing the customs formalities when the container was loaded and the vessel sailed without their knowledge. The Tribunal noted that there was no evidence to suggest that the CHA prompted the shipping line to load the container without LEO. The Tribunal referred to previous judgments to conclude that the CHA could not be held liable for the unauthorized export and set aside the penalty imposed on them. 3. Role and liability of the surveyor in the export process: The surveyor, M/s Master Marine Services Pvt. Ltd., prepared Form No.6 for the entry of the container into the terminal. The surveyor argued that Form No.6 was not a statutory document and their responsibility ended with the issuance of this form. The Tribunal acknowledged that Form No.6 was not prescribed under the Customs Act and was used only for facilitating the entry of the container into the port area. The Tribunal found no evidence of the surveyor's involvement in the unauthorized loading and sailing of the vessel and set aside the penalty imposed on them. 4. Responsibility and penalty on the shipping line agent: The shipping line agent, M/s Volkart Fleming Shipping & Services Pvt. Ltd., was responsible for the movement of the container to the port terminal and the preparation of the Export Advance List. The Tribunal found that the shipping line agent played an active role in the loading of the container and the sailing of the vessel without LEO. However, the Tribunal acknowledged that there was no evidence of intentional violation of the Customs Act by the shipping line agent. The penalty imposed on the shipping line agent was deemed too harsh and was reduced to ?50,000. 5. Liability of the terminal operator in the export process: The terminal operator, M/s Mundra International Container Terminal (MICT), was penalized for their role in the unauthorized export. The Tribunal found that the terminal operator acted based on the information provided by the shipping line agent through the Export Advance List. There was no evidence to suggest that the terminal operator was responsible for the unauthorized loading of the container. Consequently, the Tribunal set aside the penalty imposed on the terminal operator. Conclusion: The Tribunal set aside the penalties imposed on the exporter, CHA, surveyor, and terminal operator, finding no substantial evidence of their involvement in the unauthorized export. The penalty on the shipping line agent was reduced, acknowledging their role but considering the lack of intentional violation. The appeals were disposed of accordingly.
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