2022 (2) TMI 553 - AT - Customs

Confiscation of goods - insulated copper cables - loading of goods on board without let export order (LEO) - failure to produce the shipping bill before the proper officer leading to consequent breach of section 35 and section 40 of Customs Act, 1962 by the others - disregard to requirements mandated in section 50 of Customs Act, 1962 - HELD THAT - The let export order (LEO) , stipulated in section 50 of Customs Act, 1962, had been granted on 19th April 2008. With that, the process of export which was the responsibility of the exporter stood completed even if belatedly. The breach in loading of the cargo on the vessel ahead of grant of let export order (LEO) is attributable to the person-in-charge of the conveyance and not the exporter. Nonetheless, the goods, having been loaded in contravention of the prescription in section 40 of Customs Act, 1962, was liable to confiscation under section 113 (g) of Customs Act, 1962. That finding in the impugned order is without fault - the goods were not available for confiscation by the adjudicating authority and, therefore, as held by the Hon ble High Court of Bombay in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS FINESSE CREATION INC. 2009 (8) TMI 115 - BOMBAY HIGH COURT , the imposition of redemption fine is without authority of law. The regularisation of the process for export is on record. Moreover, the vessel had been allowed to depart in accordance with section 42 of Customs Act, 1962 after issue of port clearance by the proper officer though it was well within the authority of such officer to offload the offending goods. Therefore, it cannot be said that the appellant was in any way connected with illicit shipment of export cargo. Consequently, the imposition of penalty under section 114 of Customs Act, 1962 is unjustified - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of goods under section 113(g) of Customs Act, 1962.
2. Imposition of penalty under section 114 (iii) of Customs Act, 1962.
3. Alleged breach of section 50, 35, and 40 of Customs Act, 1962.
4. Justifiability of redemption fine in absence of available goods.
5. Loading of export containers without 'let export order (LEO)'.
6. Grant of 'let export order (LEO)' after loading of goods.
7. Regularization of export process and imposition of penalty.

Detailed Analysis:

1. Confiscation of Goods:
The appeal pertains to the confiscation of goods by M/s UM Cables Ltd, an exporter of insulated copper cables, under section 113(g) of the Customs Act, 1962. The goods were destined for Afghanistan through Karachi port but were confiscated due to procedural violations.

2. Imposition of Penalty:
A penalty of &8377; 7,00,000 was imposed under section 114 (iii) of the Customs Act, 1962 for loading four containers of the consignment onto the vessel without the necessary 'let export order (LEO)'. The penalty was challenged by the appellant.

3. Alleged Breach of Customs Act Sections:
The proceedings alleged that M/s UM Cables Ltd disregarded requirements under section 50 of the Customs Act, 1962, leading to breaches of sections 35 and 40. These breaches rendered the goods liable to confiscation.

4. Redemption Fine Justifiability:
The appellant argued that the imposition of a redemption fine in the absence of available goods was not legally justified, citing a judgment from the Hon'ble High Court of Bombay.

5. Loading without 'LEO':
The goods were loaded onto the vessel without the required 'let export order (LEO)', violating section 50 of the Customs Act, 1962. The departure of the vessel with the containers before the grant of 'LEO' was a key issue.

6. Grant of 'LEO' Post-Loading:
The 'let export order (LEO)' was granted after the goods were loaded, completing the export process belatedly. The responsibility for the loading breach was attributed to the person-in-charge of the conveyance.

7. Regularization and Penalty Imposition:
The regularization of the export process was noted, and it was highlighted that the appellant was not connected to the illicit shipment of export cargo. Consequently, the imposition of penalties under sections 113(g) and 114 of the Customs Act, 1962 was deemed unjustified.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal of M/s UM Cables Ltd, emphasizing the procedural irregularities and legal justifications surrounding the confiscation and penalties imposed.