2017 (4) TMI 485 - AT - Customs

Provisional release of seized cargo - change in route - The change in route was attributed to bad weather the ship experienced in Karachi - the appellants were the charterers and shipping agents of the vessel - Held that - It is the apparent that by the action of coming forward and taking responsibility of the impugned goods and seeking provisional release of the said goods, the appellant have stepped into the shows of the importer - appellant had admitted in the bond that the goods belong to the obligators. It is apparent that from the language of the said the appellant have claimed that the goods belong to them and therefore they have come forward to get the provisional release of the same. Thus, the appellants are clearly importers in terms of the definition appearing in the Customs Act. The SCN also alleges that the goods cleared at Mumbai were not the same is the goods which were seized by the customs. The impugned order fails to deal with the issue and to categorical state if the goods were later on imported into India or not. The impugned order is silent on that aspect. In view of above, the demand of duty is set-aside and the matter is remanded for decision on facts regarding the re-import of goods and the duty liability of the appellant. Penalty - Held that - The SCN does not even alleged any convenience or knowledge about the misdeclaration on the part of said shipping agent. In absence of the knowledge the penalty of ₹ 5,00,000/- appears excessive - penalty reduced to ₹ 5,000/- only. Part matter on remand - part matter decided in favor of assessee.

Summary

Issues:
1. Undeclared cargo found on vessel leading to seizure and confiscation.
2. Provisional release of goods and duty demands.
3. Dispute over importer status and duty liability.
4. Confiscation of goods and imposition of penalties.

Issue 1: Undeclared cargo found on vessel leading to seizure and confiscation:
The appeal was filed by M/s. Cargosol regarding undeclared cargo found on vessel M.V. Ali-15 at Kandla. The cargo, including used cranes and rollers, was not declared in the Import General Manifest (IGM). The goods were seized under suspicion of contravening Customs Act and placed under seizure. The master of the vessel stated the cargo was loaded from Jabel Ali for Mumbai but diverted to Kandla for a new voyage to Oman. M/s. Cargosol sought provisional release of goods, which were provisionally released on bond and bank guarantee. However, discrepancies were noted in the weight and value of goods seized at Kandla compared to those claimed to be discharged in Mumbai. The Commissioner of Customs confirmed duty demand, confiscation, and imposed penalties, leading to the appeal before the Tribunal.

Issue 2: Provisional release of goods and duty demands:
M/s. Cargosol argued the cargo diversion was due to genuine reasons and applied for IGM amendment. They contended they were not importers of the goods and the duty liability should not fall on them. The bond for provisional release did not bind them to pay duty. They argued for re-export under Customs Act Section 69 and disputed the confiscation under Section 111(f). The Tribunal upheld the confiscation and penalties, considering the appellant's actions as stepping into the importer's shoes by seeking provisional release.

Issue 3: Dispute over importer status and duty liability:
The Tribunal found M/s. Cargosol, as charterers and shipping agents, stepped into the importer's role by seeking provisional release and taking responsibility for the goods. The bond terms indicated acknowledgment of ownership by the appellants, making them liable for duty. The Tribunal distinguished the case from previous judgments and upheld the confiscation and penalties based on the definition of 'importer' under the Customs Act.

Issue 4: Confiscation of goods and imposition of penalties:
The Tribunal set aside the duty demand pending further investigation on the re-import of goods. Penalties imposed on M/s. Omega Shipping Agencies P. Ltd. and Shri Jaikumar Parmanand Ramdasani were reduced due to lack of evidence of their involvement in misdeclaration. The penalties were revised to lower amounts based on the absence of knowledge or involvement in the undeclared cargo issue.

This detailed analysis covers the issues of undeclared cargo seizure, duty demands, importer status, and penalties imposed in the legal judgment by the Appellate Tribunal CESTAT AHMEDABAD.