2013 (10) TMI 270 - AT - Customs

Attempted Export Waiver of Pre-deposit - The goods were brought into the customs area, the goods were examined by the Custom House officers, it was seen that the container had 9.89 MTs of Red Sanders valued at Rs.49.45 lakhs which was not declared in the shipping bill - Red sanders wood is prohibited for export Held that - Prima facie as far as the CHA is concerned, there is a clear lapse on his part of not having exercised with due diligence to ensure that he was actually dealing with the exporter in whose name shipping bill was filed - In fact the evidence available would indicate that he was aware that the IEC code of another person was being used - In the case of Shri. Mariappan also there is clear finding that he has been interacting with actual exporter and he was aware of the fact that shipping bill was being filed in the name of another person and he appears to have handed the sealed cover which was found have contained fraudulent documents - the applicants should be put to reasonable terms of pre-deposit for admission of appeals applicants was directed to make a predeposit for admission of appeals - upon such deposit, predeposit of balance dues arising from the order in respect of both the applicants stand waived and there shall be stay on collection of dues during pendency of the appeals Partial stay granted.

Summary

Issues:
1. Penalty imposed on Custom House Agent (CHA) and freight forwarder for attempting to export prohibited goods without declaration in the shipping bill.

Analysis:
1. The judgment involves two applications from a Custom House Agent (CHA) and a freight forwarder arising from the same impugned order regarding the attempted export of prohibited goods without declaration in the shipping bill.

2. The CHA claimed that he was not aware of the contents of the sealed container and had filed the shipping bill based on the documents and instructions provided by the freight forwarder. He argued that since his involvement in the offense was not established, the penalty imposed on him was not sustainable.

3. The freight forwarder contended that he only supplied the container as instructed and was unaware of the prohibited goods inside. He asserted that his lack of knowledge about the contents absolved him from the penalty, requesting the waiver of pre-deposit for his appeal.

4. The Revenue opposed the appeals, alleging that both the CHA and the freight forwarder were complicit in the offense. They argued that the CHA's failure to comply with 'know your client' norms and association with the exporter indicated connivance. Similarly, they claimed that the freight forwarder's interactions with the exporter demonstrated awareness of the fraudulent activity.

5. The tribunal found that both applicants were not entirely unaware of the contents of the container. The CHA's lapse in verifying the exporter's identity and the freight forwarder's involvement in handling fraudulent documents indicated their complicity in the offense.

6. Consequently, the tribunal directed both applicants to make a pre-deposit of Rs.2,50,000 each for the admission of appeals within six weeks. Upon compliance, the balance dues from the impugned order were waived, and there was a stay on the collection of dues during the appeal process.