2009 (4) TMI 283 - AT - Customs

Confiscation and imposition of penalty on the exporter and on the shipping line under Section 114(iii) of Customs Act 1962. Let Export Order issued late by one day - It is seen that the consignment for export was stuffed in the container in the factory of the exporter under the supervision of the Central Excise Officer. The necessary documents like invoice packing list and ARE-1 Form were also filed by them. The consignment was examined by the officer of Central Excise The check list for the Shipping Bill was filed - it is clear that the exporter did not have any intention to export the container which is in contravention of the Customs Act 1962. There is no lapse on their part in the export of the goods. The goods had been exported under a letter of credit and they had received the remittance also. Since the export was under EPCG Scheme there could be no reason for them not to export the goods in accordance with the provision of Customs Act 1962. - There is no evidence of any incriminating conduct against the exporter. There is no implicatory allegation in the show cause notice and/or evidence against them so as to attract the provisions of Section 114(iii) of the Customs Act 1962. Penalty on exporter not imposable - it is evident that the Shipping Line have knowingly loaded the container on the vessel without having the Shipping Bill and Let Export Order on the Shipping Bill from the proper officer of Customs thereby violating the provisions of Section 40 of the Customs Act 1962. By their conduct they have rendered the goods liable to confiscation under Section 113(g) of the Customs Act 1962 and rendered themselves liable to penal action under Section 114(iii) of the Customs Act 1962. But taking lenient view penalty is reduced on shipping line Since goods are not available for confiscation redemption fine cannot be imposed

Summary

Issues:
1. Confiscation of goods exported under Customs Act, 1962
2. Imposition of penalties on exporter and Shipping Line
3. Legal compliance in export procedures
4. Role and liabilities of Shipping Line

Analysis:

Issue 1: Confiscation of goods exported under Customs Act, 1962
The Commissioner of Customs held that the goods exported by the appellant companies were liable for confiscation under Section 113(g) of the Customs Act, 1962, due to discrepancies in the export process. The goods were not physically available, but the option for redemption was provided with a fine. The Tribunal observed that the goods were not available for confiscation at the time of the order, citing legal precedents that redemption fines cannot be imposed when goods are not available for confiscation. Hence, the redemption fine imposed on the exporter was set aside.

Issue 2: Imposition of penalties on exporter and Shipping Line
Penalties were imposed on both the exporter and the Shipping Line under Section 114(iii) of the Customs Act, 1962. The Tribunal analyzed the conduct of the exporter and found no deliberate defiance of the law or contumacious behavior, setting aside the penalty imposed on the exporter. However, the Shipping Line was found to have knowingly violated procedures by loading the container without the necessary documents, rendering the goods liable for confiscation. The penalty on the Shipping Line was reduced but upheld due to their actions.

Issue 3: Legal compliance in export procedures
The case highlighted discrepancies in the export process, including incorrect vessel information, lack of proper documentation, and loading without the necessary "Let Export Order." The Tribunal emphasized the importance of following prescribed procedures, such as obtaining the Let Export Order before loading, to avoid violations of the Customs Act, 1962. Non-compliance with export regulations can lead to penalties and confiscation of goods.

Issue 4: Role and liabilities of Shipping Line
The Shipping Line's responsibility to ensure compliance with Customs regulations was underscored. Loading the container without the requisite documentation, including the Let Export Order, was deemed a violation of Section 40 of the Customs Act, 1962. While the goods were not available for confiscation, the Shipping Line was held liable for penalties under Section 114(iii) for their actions. The Tribunal differentiated the case law related to exporters, emphasizing the distinct liabilities of Shipping Lines under the Customs Act.

In conclusion, the Tribunal allowed the appeal filed by the exporter, setting aside the penalties imposed, and partially allowed the appeal filed by the Shipping Line, modifying the Commissioner's order. The judgment emphasized the importance of legal compliance in export procedures and the liabilities of parties involved in the export process under the Customs Act, 1962.