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TMI Blog2022 (7) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... onfiscation under Section 113(i) and 113(d) of the Customs Act 1962 and imposed the penalties under Section 114 of the customs Act 1962 and under Section 114AA of the Customs Act 1962 read with Section 11(1) of the Foreign Trade (Development & Regulation) Act 1992, Rule 11 and 14(2) of the Foreign Trade (Regulation) Rules 1993 read with provisions of Section 50 of the Customs Act 1962. Being aggrieved with the impugned order Appellants filed Appeals before the Commissioner (Appeals), who vide impugned order-inappeal upheld the order of Additional Commissioner, Customs House, Mundra and dismissed the appeals filed by the Appellant. Aggrieved, the appellants have filed these Appeals before CESTAT. 3. Shri Ajay Singh, Learned Counsel appearing for the Appellant M/s Janki Dass Rice Mills and for Co-appellant Shri Devinder Kumar submits that allegations are based on statements of persons and letters from Shipping line stating that containers were discharged at Jabel Ali Port in UAE coupled with statement of their employee. No inquiry or investigation, whatsoever was conducted as to what happened to the containers/ goods after they were offloaded at Jabel Ali. During the investigation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or any evidence in the case, that the said certificates were amended at any stage in order to get the goods cleared in a country other than Iran. The findings of the Ld. Original authority as confirmed by the Appellate authority that the impugned goods have been exported to UAE merely because the same were discharged in UAE port, without verifying whether such goods could be exported to UAE in the absence of any evidence or whether these have been further shipped to Iran, is a finding totally based on assumptions and presumption. 3.3 He also submits that Original Authority as well as the Appellate authority failed to appreciate that the allegation in the notice that the goods have not reached the destination Iran, was made merely by adducing evidence to the effect that the containers were offloaded at Jebel Ali Port in UAE. This at the most can create a suspicion/doubt, but by no stretch of imagination leads to conclusion that goods did not reach Iran. It is settled position in law that 'Suspicion', however strong, cannot be a substitute for evidence. Both the adjudicating authority in the above view of the matter ought to have looked in to the documentary evidence produced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been effected only after completion of all customs procedures and reaching of the vessel in international waters by the Shipping company. Penalty under Section 114AA is leviable only in case of any "material particular" being declared false or incorrect. Mere change of port of discharge from the one originally declared in SB other is not any offence under the Customs Act. The said change in some case is due to reasons known to consignee. It is also fact that the impugned goods are duty free and not involving any export incentives. Hence the goods are not liable for confiscations and no penalty can be imposed. 3.7 Shri Paritosh Gupta, Learned Counsel appearing on behalf of Appellant M/s. V. Arjoon, CHA submits that the diversion of goods to Dubai after clearance for Iran was not brought to the notice of Customs authorities at the port of export by exporters or shipping lines, because cargo had already left Indian waters and had reached Jebel Ali and Exporters/Shipping Line had not requested for any amendment in the Shipping Bill. That no malafide can be attributed to the CHA in the absence of any motive to unlawfully derive any gain. The Role of the CHA is to file shipping bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or export of goods i.e. Rice to Iran but the goods were delivered at UAE. The remittance was received in Indian Rupees from Iran instead of free convertible foreign currency. Thus, there appeared to be mis-declaration on part of Appellant. The revenue in support of allegations relied upon the statements of Director, CHAs and the officials of Shipping Lines. However, these persons were not examined in the adjudication proceedings even after the request of Appellant and as such their statements are not admissible as evidence under the provisions of Section138B of Customs Act, which provides that - if an authority in any proceedings under the Act wants to rely upon the statement of any person (made during enquiry), such person is required to be examined as witness and if the adjudicating authority finds the evidence of the witness 'admissible', then such witness should be offered for cross-examination and only thereafter the evidence is admissible. In absence of compliance of the provision of Section138B of the Act, the statements are not admissible as evidence. Section138B of the Customs Act, 1962 reads as under :- "138B. Relevancy of statements under certain circumstances. - (1) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity to adduce all relevant evidence upon which he relies and further that the evidence of the opposite party should be taken in his presence by giving an opportunity of cross-examining the witnesses examined by that party. In the present case, neither any speaking order has been passed nor the respondent justified in not permitting the petitioner to cross-examine the above said eight witnesses. Thus, such attitude of the respondent shows that the petitioner was not given fair opportunity to defend their case, therefore, not providing an opportunity to cross-examine the above said eight witnesses, in my view, would violate the principles of natural justice. Accordingly, the impugned order is set aside and the respondent is directed to permit the petitioner to cross-examine the above said eight witnesses and pass appropriate orders on merits and in accordance with law. Such exercise shall be completed by the respondent within a period of 45 days from the date of receipt of a copy of this order. 9. In fine, for the reasons stated above, the writ petitions stand allowed. No costs. Consequently, connected miscellaneous petitions are closed." 5.2 We also find that in the present mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any evidence that the said certificates were amended at any stage in order to get the goods cleared in a country other than Iran. 5.4 Without prejudice to the above, we further find that Appellant lost the ownership of the goods as soon as 'let export order' was issued by the Customs authorities. After the said let export order it was the responsibility of the Shipping Lines to ship the goods to the foreign buyer and the exporter having no control over the goods. Hence, Appellant cannot be held responsible if the importer situated at Iran had given instruction to change the port from Bandar Abbas port to Jabel Ali port as after the 'let export order' was issued by the Customs authorities it was the importer at Iran who became the owner of the goods. In support of this finding we rely upon the CBEC circular No. 999/2015-CX dated 28-02-2015. This circular is with regard to at what point of time the transfer of property takes place in cases of exports. The CBEC has categorically clarified that after the let export order is issued the transfer of property can be said to have taken place at the port where the shipping bill is filed by the exporter. Further the Hon'ble Apex Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Apex Court as reported in 2005 (184) ELT A36. This judgment has been followed by this Tribunal in the case of Hillari Computer Exports (P) Ltd vs. Commr. of Cus., Visaskhapatnam reported in 2006 (199) ELT 636 and in the case of Bank of Nova Scotia Vs. Commissioner of C.Ex (Adj), Bangalore reported in 2009 (233) ELT 260 (Tri.-Bang). Though the first two judgments relate to period when FERA was in operation whereas the third judgment in the case of Bank of Nova Scotia relates to period when FEMA came into operation wherein it has been held that if at all there is violation of FEMA and the related regulations suitable action lies with the enforcement authorities and Reserve Bank of India. It has further been held that with regard to the violations of Exim policy, adjudication can be done only by authorities notified under section 13 of Foreign Trade (Development & Regulation Act), 1992. Hence in the facts of the present case since it was only a case of alleged violation of the provisions of Foreign Trade (Development & Regulation Act) and rules made there under as well as that of Foreign Exchange Management Act, the Customs authorities did not have jurisdiction to issue the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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