2022 (12) TMI 482 - AT - Customs

Levy of penalty on the Company as well as on the Director under Section 114(i) of the Customs Act, 1962 - seizure of Red Sandal Wood - illegal export out of India - prohibited goods or not - HELD THAT - The Appellant is neither a Customs Clearing Agent nor an exporter/importer. The Appellant s main business activities remain restricted to the booking of empty containers as per the requirement of the exporter and in appropriate cases merely suggested the suitable Clearing Agent to facilitate their export and with this their activities come to an end. The Manager of M/s. Marine Container Services (I) Pvt.Ltd. mentioned in his submission that the said container belongs to Perma Container Line and M/s. Marine Container Services is the agent of M/s.Perma Container Line - the Department proceeded against the Appellant on the ground that they failed to bring forward the real exporter and thereby abetted and connived with the exporter in the attempt of illegal export of prohibited goods. I find that in the present electronic era, procuring orders and conducting business activities online taking advantage of internet facility is a normal phenomenon. The allegation of abetting in the attempted illegal export of prohibited goods are not supported by any direct, corroborative or cogent evidence. The entire proceedings against the Appellants have been framed on the basis of assumption and presumption without conclusively establishing any direct nexus between the Appellants and the exporter. It is also not understood that why the exporter was not traced to bring the entire proceedings to a logical end. It has been held time and again that separate penalty on the company and the Director for the same default should not be imposed. The impugned order is modified to the extent of setting aside of penalty of Rs.5.00 Lakh each imposed under Section 114(i) of the Customs Act, 1962 on M/s.Geotrans Maritime Logistics Pvt.Ltd. and its Director Shri Tirthankar Chakraborty - Appeal allowed in part.

Issues Involved:
1. Imposition of penalty under Section 114(i) of the Customs Act, 1962.
2. Allegations of abetment in the attempted illegal export of prohibited goods.
3. Responsibility and involvement of various parties including the Freight Forwarder, CHA, and Transporter.
4. Validity of the documents and statements provided during the investigation.

Detailed Analysis:

1. Imposition of penalty under Section 114(i) of the Customs Act, 1962:
The present Appeals were filed by a Company and its Director against the order of the Commissioner(Appeals) imposing a penalty of Rs.5.00 Lakhs each under Section 114(i) of the Customs Act, 1962. The penalty was imposed in connection with the attempted illegal export of Red Sandal Wood weighing 3120 Kgs. The Tribunal found that separate penalties on the company and the Director for the same default should not be imposed. Consequently, the penalties were set aside.

2. Allegations of abetment in the attempted illegal export of prohibited goods:
The Customs proceedings were initiated based on the seizure of a container stuffed with Red Sandal Wood instead of the declared Cast Iron Products. The investigation revealed that the Freight Forwarder (Appellant) and the CHA were involved in facilitating the export. The Appellant contended that they merely acted as a Freight Forwarder, procuring containers and arranging CHA for the exporter, without involvement in stuffing, loading, or processing the shipping documents. The Tribunal found that the allegations of abetment were not supported by direct, corroborative, or cogent evidence, and the proceedings were based on assumptions and presumptions without establishing a direct nexus between the Appellant and the exporter.

3. Responsibility and involvement of various parties including the Freight Forwarder, CHA, and Transporter:
The investigation involved multiple parties, including the CHA, the Freight Forwarder (Appellant), and the Transporter. Statements were recorded from various individuals, including representatives of the CHA and the container agent. The CHA did not take authorization from the exporter and was found liable for penal action. The Transporter and its owner were initially implicated but were later exonerated by the adjudicating authority. The Tribunal noted that the Appellant's role was limited to booking containers and suggesting a suitable CHA, and there was no evidence of their involvement in the illegal export attempt.

4. Validity of the documents and statements provided during the investigation:
Several documents, including the Shipping Bill, ARE-1, and invoices, were found to be forged. The Superintendent of Central Excise denied signing the documents, and the declared exporter denied any connection with the consignment. The Appellant's statements indicated that they had no direct interaction with the exporter, except through telephonic conversations. The Tribunal observed that the entire case against the Appellant was built on assumptions without conclusive evidence linking them to the illegal export attempt.

Conclusion:
The Tribunal allowed the Appeals filed by the Appellants, setting aside the penalties imposed under Section 114(i) of the Customs Act, 1962. The decision was based on the lack of direct evidence and the reliance on assumptions and presumptions in the proceedings against the Appellants. The Tribunal emphasized the importance of conclusive evidence in penal proceedings under the Customs Act. The Appeals were allowed with consequential relief as per law. (Order pronounced in the open court on 05 December 2022.)

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