2009 (3) TMI 395 - AT - Customs

Export/loading on vessel goods without let export order Penalty Exporter having no knowledge about same not being informed by shipping line but filing shipping bill before those dates - The exporter were not going to gain anything by loading the containers without customs clearance. The goods under export were neither prohibited good nor Customs duty was attracted upon their export. There is also no misdeclaration of any kind alleged in the Shipping Bill which was filed before loading of the consignment on the vessel. - The conduct of the exporter in the present case does not indicate that they had acted deliberately in defiance of law or were guilty of conduct contumacious or dishonest or acted in conscious disregard of their obligation. - The subject goods loaded on the vessel without the Let Export Order from the proper officer of Customs were not placed under seizure or were not assessed provisionally at the time of export. Confiscation and fine is set aside - the responsibility of the physical loading of the containers is primarily of the Shipping Line - The Shipping Line should have Shut Out the consignment included in the loading list for which the Shipping Bill duly passed by the proper officer of Customs was not handed over to it. But they failed to do. Hence the penalty is imposable on them for violating the provisions of Section 40 of the Customs Act 1962. However taking into consideration the submissions made by the Shipping. Line I am inclined to take a lenient view and accordingly reduce the penalty from Rs. 7, 00, 000/- to Rs. 3, 50, 000/-. - The appeal filed by the exporter is allowed in full. The appeal filed by the Shipping Line in partially allowed

Summary

Issues:
1. Confiscation of exported goods without proper documentation.
2. Duty of exporter and Shipping Line in the export process.
3. Imposition of penalties under Section 114(iii) of the Customs Act, 1962.
4. Redemption fine under Section 125 Customs Act, 1962.
5. Responsibility of the Shipping Line in loading goods without proper documentation.

Issue 1: Confiscation of exported goods without proper documentation
The Commissioner held that the goods exported under Shipping Bill No. 4565816 were liable to confiscation due to lack of proper documentation. The exporter failed to inform the Shipping Line to stop loading the containers without the supervision and approval of Customs officers. However, the Commissioner did not specify any evidence indicating why the exporter should have stopped the containers from being loaded as per the original schedule.

Issue 2: Duty of exporter and Shipping Line in the export process
The Shipping Line loaded the containers without the necessary documentation, such as the Shipping Bill duly endorsed by Customs with 'Let Export Order'. The exporter had fulfilled their duty by filing the Shipping Bill on time, and the CHA assured to hand over the customs clearance documents as per the original schedule. The exporter was not aware of the change in the vessel's schedule and had no reason to take proactive measures before the scheduled date.

Issue 3: Imposition of penalties under Section 114(iii) of the Customs Act, 1962
The Tribunal held that the penalty imposed on the exporter under Section 114(iii) was not justified. The exporter did not act deliberately in defiance of the law or show contumacious conduct. The Tribunal referenced a Supreme Court judgment to support its decision that penalties should not be imposed unless there is clear evidence of intentional wrongdoing.

Issue 4: Redemption fine under Section 125 Customs Act, 1962
The Tribunal referred to a High Court judgment stating that redemption fine cannot be imposed when goods are not available for confiscation and have been released by Customs authorities without a bond. Following this precedent, the Tribunal set aside the redemption fine of Rs. 5,00,000 imposed on the exporter as the goods were not available for confiscation.

Issue 5: Responsibility of the Shipping Line in loading goods without proper documentation
The Shipping Line failed to adhere to the requirement of not permitting the loading of export goods without the proper documentation. Section 40 of the Customs Act, 1962 places the onus on the person-in-charge of the vessel to ensure compliance with customs procedures. The Shipping Line should have refused to load the containers without the necessary documentation, leading to a reduced penalty of Rs. 3,50,000 based on their submissions.

In conclusion, the Tribunal allowed the appeal filed by the exporter in full and partially allowed the appeal filed by the Shipping Line, modifying the impugned order passed by the Commissioner accordingly.