2017 (3) TMI 286 - AT - Customs

Container Freight Station - violation of provisions of Handling of Cargo & Customs Area Regulations, 2009 - one of the export consignment the goods were substituted after the same were examined by the Customs - penalty - Held that - certain steel material, which brought in the CFS for export was later substituted with Sandalwood. The said cargo was examined when it was in CFS and thereafter it was the responsibility of the CFS to transfer the same safely to the port. However, during transfer from the CFS to Port, the said cargo was substituted with prohibited cargo. The act and omission of CFS need to be examined in this background of specific violation on their part to do their duties. Just because examination was done without de-stuffing, it cannot be said that the appellant had compromised to the cargo in its custody. It is pointed out that the same was examined by the customs officer and it if was violation of any regulation then the customs officer, who examined the goods is equally responsible for the same. It is apparent that the responsibility of safe transit of the goods from CFS to Port is that of the appellant and callousness in ensuring the safety and security is the violation on their part. Penalty under various regulations is reduced from ₹ 2 lakhs to ₹ 1.5 lakhs - the penalty u/s 117 cannot be upheld - appeal allowed - decided partly in favor of appellant.

Summary

Issues: Violation of provisions of Handling of Cargo & Customs Area Regulations, 2009, imposition of penalty under Section 117 of the Customs Act, 1962.

Analysis:

1. Unauthorized Access to CFS: The appellant was charged with providing unauthorized access to individuals inside the CFS, contravening regulation 5(1)(m) of the Regulations. The appellant argued that the individuals had made necessary entries in the register, but failed to produce the register as evidence. The Tribunal found that unauthorized access was indeed granted as no register was provided to corroborate the claim.

2. Examination of Cargo without Destuffing: The next allegation was that the CFS allowed examination of cargo without destuffing from the container, violating regulation 6(1)(i) of the Regulations. The appellant argued that destuffing was not required as per the regulation. However, the Tribunal held that the responsibility for the safety and security of the cargo while in custody of the CFS was compromised by not destuffing the cargo for examination.

3. Secure Transit of Goods: Another violation pointed out was the failure to provide secure transit of goods from CFS to the Port, contravening regulation 6(1)(k) of the Regulations. The appellant allowed transit without safeguards, resulting in cargo substitution. The Tribunal concluded that the appellant failed to ensure secure transit, which was their responsibility.

4. Non-Filing of Form-13: The appellant was charged with non-filing of Form-13 properly, where incomplete and misleading details were provided. The Tribunal noted that the appellant's carelessness in ensuring the safety and security of the cargo during transit constituted a violation on their part.

5. Penalty under Section 117: The lower authorities imposed a penalty under Section 117 of the Customs Act, 1962, without identifying any specific violation under the Act. The Tribunal set aside the penalty under Section 117 as no violation under the Act was established during the proceedings.

In conclusion, the Tribunal found three out of the four charges established, leading to a reduction in penalties imposed under various regulations. The penalty under Section 117 was set aside due to the lack of specific violation identified. The appeal was partly allowed with reduced penalties, emphasizing the importance of complying with regulations for handling cargo and ensuring its security during transit.