2017 (5) TMI 1066 - AT - Customs

Penalty u/s 114(iii) of the CA, 1962 - without having Let Export Order (LEO) and before completion of the assessment of the shipping bill filed, the container was loaded on the vessel and shipped on 23.11.2006 - Held that - there is nothing on record to indicate involvement of the CHA in export of the container before assessment of the shipping bill or LEO issued by the Custom Department - in absence of a positive role of CHA for export of cargo without LEO or before assessment of the shipping bill penalty cannot be imposed on them u/s 114(iii) of the CA, 1962 - penalty set aside - decided in favor of appellant-CHA.

Summary

Issues involved:
1. Appeals against Order-in-Appeal No.185/2009/Cus and No.MUN-CUSTM-000-APP-006-14-15
2. Loading and export of containers without Let Export Order (LEO)
3. Imposition of penalties under Section 114(iii) of the Customs Act, 1962
4. Role and responsibility of Customs House Agents (CHA) in container export

Analysis:
1. The appeals were filed against two orders by the Commissioner (Appeals) regarding the loading and export of containers without Let Export Order (LEO) and the subsequent imposition of penalties under Section 114(iii) of the Customs Act, 1962. Both appeals were taken up together due to a common issue.

2. In the first appeal, the container was loaded and shipped before the completion of assessment, leading to a penalty proposal under Section 114(iii). The second appeal involved the export of a factory sealed container pending assessment, resulting in penalties imposed on the appellants by the Commissioner (Appeals).

3. The appellants argued that the CHA was unaware of the container's export after being gated in and that the responsibility lies with the shipping line agent for loading and exporting the container after receiving LEO and assessing the shipping bill. They cited various judgments to support their claim that penalties on the CHA were not justified.

4. The Revenue supported the findings of the Commissioner (Appeals), while the Tribunal, after considering the submissions, found no evidence of CHA involvement in the export before assessment. Referring to a previous case, the Tribunal emphasized the primary responsibility of the shipping line agent in such situations. Consequently, the penalties imposed on the appellants were set aside, and the appeals were allowed.

This judgment clarifies the distinct roles of various parties involved in the export process and highlights the importance of following proper procedures to avoid penalties under the Customs Act, 1962.