2018 (9) TMI 46 - AT - Customs

Smuggling - contraband item - red sanders - absolute confiscation - Penalties on S/Shri R. Ramesh, Manager, K. Shanmugam, Executive (Operations) both of GFLPL i.e., the CHA firm - Held that - Even though, the adjudicating authority has found fault with the two persons for being negligent in performing their roles of the CHA, but the fact remains that there is no evidence on record to show that these two persons were aware of the presence of the contraband in the export consignment - there is no evidence on their involvement in any other way in the fraud - penalties set aside. Penalty on Shri C. Srijith, Branch Manager of ILFF - role attributed to him is that of a middle-man, who has liaised with the partners of the exporting firm, and also approached the CHA firm with the export documents for filing the shipping bill - Held that - There is nothing on record indicating any other role played by Shri C Srijith in the export fraud. He cannot be penalised for being actively engaged in the handling of export cargo without CHA licence. In the absence of any evidence linking Shri C. Srijith to the export fraud, penalties set aside. Penalty on S/Shri D. Srinivasa Rao and A.M. Jamaludheen both Partners of RCO, the exporter - Held that - Shri D. Srinivasa Rao had admitted in his statement that export documents were signed by him in the capacity of being a Partner of RCO. Shri A.M. Jamaludheen in his statement has also admitted to be Partner in the export business. In view of the fact that the contraband goods having been found in the consignment entry for export and the fact that S/Shri D. Srinivasa Rao and A.M. Jamaludheen both Partners of the exporter, penalties upheld - the confiscation of the export consignment as well as penalties imposed on S/Shri D. Srinivasa Rao and A.M. Jamaludheen upheld. Option of redemption fine - case of appellant is that goods, which are not in the nature of contraband found in the export consignment, should have been given an option for redemption - Held that - From the record, we find that no request have been made by the appellants to the adjudicating authority for release of the goods other than the contraband. Hence, we find no reason to consider the same. Appeal disposed off.

Summary

Issues Involved:
1. Confiscation of export goods under section 113(d)(h)(i) and section 118(b) of the Customs Act, 1962.
2. Imposition of penalties on various individuals associated with the export transaction.
3. Adherence to principles of natural justice, specifically the right to cross-examination.
4. Request for redemption of non-contraband items in the export consignment.

Issue-wise Detailed Analysis:

1. Confiscation of Export Goods:
The adjudicating authority ordered the confiscation of the export goods, including "Red Sander Wood Pieces," under section 113(d)(h)(i) and section 118(b) of the Customs Act, 1962. The goods, declared as "Indian Artistic Handicrafts," were found to contain 2,428 kgs of Red Sander Wood, which is prohibited for export under "CITES Communication." The consignment was examined by the Assistant Conservator of Forests, who confirmed the presence of Red Sander Wood. The Tribunal upheld the confiscation of the Red Sander Wood, finding no infirmity in the adjudicating authority's decision.

2. Imposition of Penalties:
- S/Shri R. Ramesh and K. Shanmugam (GFLPL): The Tribunal set aside the penalties imposed on these individuals, finding no evidence that they were aware of the contraband in the export consignment. Their involvement was limited to filing the shipping bill based on documents provided by Shri C. Srijith. They were not present during the stuffing or examination of the container.

- Shri C. Srijith (ILFF): The penalty on Shri C. Srijith was also set aside. The Tribunal found no evidence linking him to the export fraud. His role was limited to liaising with the exporter and the CHA firm and sealing the container with a dummy OTL. The adjudicating authority's presumption of his involvement in the stuffing of the goods was not supported by evidence.

- S/Shri D. Srinivasa Rao and A.M. Jamaludheen (RCO): The Tribunal upheld the penalties imposed on these partners of the exporting firm. Both individuals admitted to their roles in the export transaction. The presence of prohibited Red Sander Wood in the consignment justified the penalties.

3. Principles of Natural Justice:
The appellants argued that their request for cross-examination of various individuals, including forest officials, was not addressed. The Tribunal found that the adjudicating authority had rejected the request for cross-examination on 09.07.2007, and no appeal was filed against this rejection. Therefore, the appellants could not raise this issue at the Tribunal stage.

4. Redemption of Non-Contraband Items:
The appellants contended that the non-contraband items in the consignment should have been given an option for redemption. The Tribunal found no record of any request made to the adjudicating authority for the release of non-contraband goods and, therefore, saw no reason to consider this argument.

Conclusion:
- The penalties on S/Shri R. Ramesh, K. Shanmugam, and C. Srijith were set aside.
- The confiscation of Red Sander Wood and penalties on S/Shri D. Srinivasa Rao and A.M. Jamaludheen were upheld.
- The appeal regarding the redemption of non-contraband items was dismissed due to the lack of a prior request.

Disposition of Appeals:
- R. Ramesh (GFLPL): Penalty set aside.
- K. Shanmugam (GFLPL): Penalty set aside.
- D. Srinivasa Rao (RCO): Confiscation upheld, penalty sustained.
- A.M. Jamaludheen (RCO): Confiscation upheld, penalty sustained.
- M/s. Rare Craft Agencies: Appeal rejected.
- C. Srijith (ILFF): Penalty set aside.

(Dictated and pronounced in open court)